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IC 8988 



Bureau of Mines Information Circular/1984 



Nickel Availability— Domestic 

A Minerals Availability Program 
Appraisal 

By D. A. Buckingham and Jim F. Lemons, Jr. 



<^^k 



UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 8988 



Nickel Availability— Domestic 

A Minerals Availability Program Appraisal 

By D. A. Buckingham and Jim F. Lemons, Jr. 



- 




UNITED STATES DEPARTMENT OF THE INTERIOR 
William P. Clark, Secretary 

BUREAU OF MINES 
Robert C. Horton, Director 



As the Nation's principal conservation agency, the Department of the 
Interior has responsibility for most of our nationally owned public lands 
and natural resources. This includes fostering the wisest use of our land 
and water resources, protecting our fish and wildlife, preserving the 
environmental and cultural values of our national parks and historical 
places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to 
assure that their development is in the best interests of all our people. The 
Department also has a major responsibility for American Indian reserva- 
tion communities and for people who live in island territories under U.S. 
administration. 








Library of Congress Cataloging In Publication Data 

Buckingham, 0. A. (David A.) 

Nickel availability — domestic 

(Information circular; 8988) 

Bibliography: p. 26 

Supt. of Docs, no.: I 28.27: 

1 . Nickel industry— United States. 2. Nickel mines and mining— United States. 
I. Lemons, Jim F. II. Title. III. Series: Information circular (United States. Bureau of 
Mines); 8988 



TN295.U4 
[HD9539.N52U5] 



622s 



[333.8'53] 



84-600039 



PREFACE 

To asses3 the availability of nonfuel minerals, the Bureau of Mines Minerals 
Availability Program identifies, collects, compiles, and evaluates information on 
producing, developing, and explored mines and deposits and on mineral processing 
plants worldwide. Objectives are to classify domestic and foreign resources, to 
identify by cost evaluation resources that are reserves, and to prepare analyses of 
mineral availabilities. 

This report is one of a continuing series of minerals availability reports that 
analyze the availability of 34 minerals from domestic and foreign sources. Ques- 
tions about the program should be addressed to Chief, Division of Minerals Avail- 
ability, Bureau of Mines, 2401 E Street, NW., Washington, DC 20241. 



CONTENTS 



Page 

Preface Hi 

Abstract 1 

Introduction 2 

Minerals Availability Program evaluation 

procedures 3 

Deposit selection and verification 3 

Economic evaluation 4 

Nickel product form and cost-price analysis . . 5 
Identification and quantification of domestic 

nickel resources 6 

Nickel sulfides 8 

Missouri lead-zinc and cobalt-nickel sulfides . . 10 

Nickel laterites 11 

Seabed nodules 12 

Engineering evaluation 12 

Recovery of nickel from sulfides 12 

Pyrometallurgical postmill processing 13 

Hydrometallurgical postmill processing 13 

Bureau of Mines chalcopyrite upgrade 

process 13 

Recovery of nickel from laterites 14 

Pyrometallurgy 14 

Hydrometallurgy 14 



Page 

Capital and operating costs for proposed 

domestic nickel operations 15 

Operating costs 15 

Mine operating costs 15 

Postmine process operating costs 15 

Transportation costs 16 

Capital costs 16 

Potential domestic nickel availability 17 

Primary and coproduct nickel deposits 17 

Potential annual nickel availability 18 

Byproduct nickel deposits 18 

Factors that affect nickel availability 19 

Effect of byproduct and coproduct revenues . . 19 

Effects of energy and labor costs 21 

Energy cost variations 21 

Labor cost variations 22 

Effects of variable nickel recoveries 22 

Effects of transportation 23 

Conclusions 25 

References 26 

Appendix 27 



ILLUSTRATIONS 

1. Distribution of nickel consumption by use as of June 1983 2 

2. Minerals Availability System (MAS) program workflow 4 

3. Classification of mineral resources 6 

4. Comparison of total estimated domestic nickel resources with those included in this study 7 

5. Distribution of demonstrated domestic nickel resources by ore type 8 

6. Location of domestic nickel deposits 9 

7. Location of proposed operations in Minnesota's Duluth Gabbro Complex and proximity to the Boundary 

Waters Canoe Area 9 

8. Location of Brady Glacier and Yakobi Island, AK, nickel sulfide deposits 10 

9. Location of Crawford Pond, ME, nickel pyrrhotite sulfide deposit 1C 

10. Location of Buick, Fletcher, and Magmont Mines in Missouri's lead-zinc Viburnum Trend 1C 

11. Location of Madison Mine in Missouri's lead-zinc Viburnum Trend 11 

12. Location of nickel laterite deposits in California and Oregon 11 

13. Location of Cle Elum nickel laterite deposit 11 

14. Total potentially available nickel from domestic deposits at identified and demonstrated resource levels 17 

15. Annual production from domestic deposits at the demonstrated resource level, related to total cost of 

production and year of production 18 

16. Annual production from domestic deposits at the identified resource level, related to total cost of 

production and year of production 19 

17. Distribution of byproduct and coproduct revenues generated by each commodity produced from sul- 

fide and laterite deposits 20 

18. Comparison of total nickel availability with variations in commodity market prices 20 

19. Distribution of direct operating costs by deposit type for domestic nickel deposits 21 



TABLES 



1. Properties reviewed in this study 

2. Commodity prices used in this study 

3. Nickel product forms 

4. Domestic resource data of the 23 properties selected for availability analysis 



CONTENTS — Continued 

TABLES — Continued 

Page 

5. Identified nickel resources 7 

6. Estimated domestic nickel resources by deposit type i 8 

7. Estimated weighted average operating cost data for nonproducing domestic nickel operations .... 15 

8. Estimated capital cost data for nonproducing domestic nickel operations 16 

9. Total potential available nickel from domestic resources at selected total-cost-of -production ranges . . 17 

10. Estimated annual availability of recoverable nickel for various years at an average total production 

cost of $7.60 per pound nickel 18 

11. Domestic nickel deposits containing at least 10,000 t of recoverable nickel 19 

12. Comparison of total available nickel within various total-cost-of-production ranges at various levels of 

byproduct and coproduct revenues , 20 

13. Energy-related variations in potential available nickel from domestic nickel deposits 22 

14. Labor-related variations in potential available nickel from domestic nickel deposits 22 

15. Typical recoveries of nickel and coproducts from domestic resources, by metallurgical process and ore 

type 23 

16. Metallurgical recoveries used in this analysis 23 

17. Effects of metallurgical recoveries on the potential availability of nickel over various total-cost-of- 

production ranges 24 

18. Distances, rates, destinations, and modes used in the transportation analysis 24 

19. Transportation-related cost variations compared with the base analysis 24 

20. Comparison of estimated total potential available nickel at various total-cost-of-production ranges 

for transportation options 24 

A-l. Ownership and type of mineral holdings of domestic nickel properties 27 



UNIT OF MEASURE ABBREVIATIONS USED IN THIS REPORT 

°C degree Celsius sq km square kilometer 

ha hectare sq m square meter 

km kilometer t metric ton 

lb pound t/km metric ton per kilometer 

m meter tr oz troy ounce 

pet percent wt pet weight percent 

psig pound per square inch, gauge yr year 



NICKEL AVAILABILITY -DOMESTIC 
A Minerals Availability Program Appraisal 

By D. A. Buckingham 1 and Jim F. Lemons, Jr. 2 



ABSTRACT 



The Bureau of Mines evaluated potential availability of domestic nickel from 
23 deposits. Evaluations included an estimation of in situ and recoverable re- 
sources, applicable mining and processing technologies, and capital and operating 
costs. Discounted cash flow analysis with a 15-pct rate of return was used to deter- 
mine the average total cost of production of each operation. Identified in situ re- 
sources contain 9.0 million metric tons (t) of nickel ; 5.5 million t is recoverable 
as nickel metal or ferronickel. Demonstrated in situ resources contain 8.2 million t 
of nickel ; 4.8 million t is recoverable as nickel metal or ferronickel. No nickel is 
available at a total cost of production equal to the January 1983 market price of 
$3.24 per pound. Analyses indicate that potential annual production can only meet 
current consumption levels at a total cost of production of $7.60 per pound of nick- 
el. Nickel's availability is contingent on (1) successful adaptability of nickel pro- 
cessing methods to domestic resources, (2) location of a smelting facility, and (3) 
marketability of byproducts and copro ducts. Analyses were performed on the 
effects of byproduct and coproduct revenues, energy, labor, and transportation 
costs, and metallurgical recoveries on nickel's availability. 



1 Geologist. 

3 Supervisory physical scientist. 

Minerals Availability Field Office, Bureau of Mines, Denver, CO. 



INTRODUCTION 



Nickel is one of four strategic materials included 
in the Defense Materials System (1, p. 621 ). 3 A strate- 
gic material is a commodity whose lack of availability 
during an emergency situation (embargo, cartel ac- 
tion, or wartime) would seriously affect the economic, 
industrial, and defensive posture of this country. The 
purpose of the Minerals Availability Program's do- 
mestic nickel availability analysis is to evaluate 
potential domestic production of nickel, which could 
decrease U.S. dependence on foreign sources. In 1982 
the United States relied on imports for about 76 pet 
of its nickel demand. Approximately 78 pet of these 
nickel imports for 1982 came from four countries: 
Canada, 41 pet; Australia, 16 pet; Botswana, 11 pet; 
and Norway, 10 pet. Total estimated imports for 1982 
were approximately 119,000 t of nickel (2, p. 1). 

The Federal Emergency Management Agency 
(FEMA) in 1982 established a stockpile goal for 
nickel of 181,437 t. The existing Government stockpile 
supply (November 1982), however, is only 29,220 t of 
nickel, (3, p. 3), with 1982 yearend industrial stock- 
piles estimated at 74,389 t (-4, p. 106) . 

Nickel is a vital commodity to the United States 
because of its extensive use as an alloy with other 
metals. Eighty-five percent of all domestic nickel is 
used in metal alloys. The steel industry accounts for 
60 pet of all domestic nickel consumption (5, p. 1-2). 
Nickel adds strength and corrosion resistance to metal 
materials over a wide range of temperatures and pres- 
sures. In addition to being used in standard steel 
alloys, nickel is used in superalloys, various nickel and 
copper alloys, magnetic alloys, and electroplating. 
Nickel salts and nickel oxides are used as catalysts, 
in batteries, fuel cells, and insecticides. Domestic uses 
of nickel as of June 1983 are shown in figure 1 (6\ 
p. 2) . Consumption for 1982 was estimated at 157,850 
t U, p. 106). The Bureau of Mines forecasts a 2.1- 
pct annual growth rate through 1990 (8-4). This in- 
crease is expected to be principally in the chemical 
and petroleum-processing industries (7, p. 19-15). 

Despite high consumption levels of nickel, the 
United States has not developed a large domestic nickel 
production industry. This lack of production capability 
is due in part to secure foreign sources of nickel. The 
only integrated mine-to-metal nickel producer in the 
United States was Hanna Mining Co.'s Nickel Moun- 
tain Mine near Riddle, OR, which was closed on April 
19, 1982 (8), and subsequently reopened in late 1983. 
Negotiations were held in 1983 to attempt to reduce 
electricity costs to Nickel Mountain, and thereby en- 
able resumption of production. This operation pro- 
duced an estimated 11,000 t of nickel as ferronickel in 
1981 and about 2,800 t in 1982 U, p. 106). The 1981 
production amounted to about 6 pet of that year's 
domestic consumption. AMAX Inc.'s Port Nickel Re- 
finery at Port Nickel, LA, is the only domestic primary 
nickel refinery. Port Nickel refines nickel matte from 
Australia and Botswana. This refinery has a production 



All other nickel products 
4.0 pet 




* Italicized numbers In parentheses refer to Items In the list of 
references preceding the appendix. 



Figure 1. — Distribution of nickel consumption by use as of 
June 1983. 

capacity of about 38,100 t of nickel metal per year. 
Although some of the production is exported, most is 
for domestic consumption (6, p. 1). About 1,000 t of 
nickel is recovered annually as a byproduct from 
domestic copper refineries (3, p. 7). 

Initially, 36 nickel deposits in the continental 
United States and Alaska were reviewed for possible 
detailed analysis (table 1). (The appendix lists owner- 
ship and control data for these properties.) Selection 
of these nickel properties was based upon discussion 
with Bureau of Mines commodity specialists and field 
center personnel, industry, and academia. Properties 
were included if sufficient information existed to de- 
termine demonstrated and/or inferred resource ton- 
nages and grades, and to propose mine and mill tech- 
nologies. This study analyzes potential significant do- 
mestic nickel resources to determine the average total 
cost of nickel production and sensitivity of this cost to 
changes in economic and engineering design pa- 
rameters. 

Sensitivity studies were conducted on the major 
parameters that affect nickel availability, including 
energy and labor costs. The cost of energy has become 
a critical factor in all mining and processing opera- 
tions, and high labor costs have caused ongoing min- 
eral operations to be stopped and proposed ventures 
to be delayed or abandoned. The impact of byproduct 
and coproduct recovery on nickel availability was also 
analyzed. Many of the domestic nickel deposits contain 
cobalt, copper, gold, lead, silver, and zinc. These by- 
product commodities, when recovered and marketed, 
can produce important revenues that affect the eco- 



Table 1. — Properties reviewed in this study 



State and property name 



Status 1 



Ore type 



Proposed mining 
method 



Primary 
commodity 



Proposed processing 
method 



Alaska: 

Brady Glacier Explored 

.do., 
.do., 
.do., 
.do.. 



.do. 
.do. 
do. 
.do. 
.do. 
.do. 

.do. 
.do. 
.do. 
.do. 
.do. 



Funter Bay . 

Mirror Harbor 

Snipe Bay 

Yakobi Island 

California: 

Elk Camp area 

Gasquet Laterite 

Little Rattlesnake Mountain. 

Pine Flat Mountain 

Red Mountain area 

Maine: Crawford Pond 

Minnesota: 

Birch Lake area 

Dunka River 

Ely Spruce area 

MINNAMAX 

Partridge River 

Missouri: 

Annapolis Mine Past producer. 

Bonne Terre Mine do 

Brushy Creek Producer 

Buick Mine do 

Fletcher Division do 

Indian Creek do 

Madison Mine Past producer. 

Magmont Mine Producer 

Milhken Mine do 

Mine La Motte Group Past producer. 

West Fork Explored 

Montana: Stillwater do 

Oregon: 

Eight Dollar Mountain do 

Nickel Mountain Mine 2 Producer 

Red Flat Explored 

Rough and Ready do 

Woodcock Mountain do 

Washington: 

Blewett Pass do 

Cle Elum Iron-Nickel do 

Mt. Vernon Nickel do 



Sulfide . 
..do... 
..do... 
..do... 
. .do . . . 

Laterite. 
. .do . . . 
..do... 
..do... 
..do... 
Sulfide . 

..do... 
..do... 
..do... 
. .do . . . 
. .do . . . 

. .do . . . 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 
..do... 

Laterite. 
. .do . . . 
. .do . . . 
. .do . . . 
..do... 

..do... 
..do... 
..do... 



Underground 
Surface 

do 

do 

do 



Nickel-copper 

...do 

....do 

....do 

....do 



..do. 
..do. 
..do. 
..do. 
..do. 
..do. 



Nickel-cobalt . 

..do 

..do 

..do 

. .do 

. .do 



Surface-underground . 

'.'.'.'.do'.'. '.'.'.'.'.'. '.'.'.'.'.'. 

....do 

....do 



Nickel-copper 

....do 

....do 

....do 

....do 



Underground 

..do 

..do 

..do 

..do 

..do 

..do 

..do 

..do 

..do 

..do 

Surface 



.do. 
.do. 
.do. 
.do. 
.do. 

.do. 
.do. 
.do. 



Lead-zinc 

.do 

.do 

.do 

.do 

.do 

Cobalt-nickel . 

Lead-zinc 

... .do 

....do 

....do 

Nickel-copper 



Nickel-cobalt . 

... .do 

....do 

....do 

....do 



....do 
... .do 
... .do 



Flotation. 
Do. 
Do. 
Do. 
Do. 

Roast-reduction leach. 

Do. 

Do. 

Do. 

Do. 
Flotation. 

Do. 
Do. 
Do. 
Do. 
Do. 

Do. 

Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 
Do. 

Roast-reduction leach. 
Ferronickel-reduction. 
Roast-reduction leach. 

Do. 

Do. 

Do. 

Do. 
Do. 



1 Status as of January 1981 . 

2 Property closed as of April 1982, reopened in 1983. 



nomic viability of the operation and thus the avail- 
ability of nickel. In addition, a sensitivity analysis was 
conducted on the effects of transportation costs of con- 
centrates to selected postmill processing sites. Domes- 
tic nickel availability is contingent upon the avail- 
ability of smelting capacity. Additional smelting 
capacity may be realized by construction of a domestic 
facility or shipment of concentrates to foreign smel- 
ters. In either event, transportation costs become a 
critical factor. 

The principal technological constraint is lack of 



established commercially adaptable metallurgical meth- 
ods for recovering nickel from domestic resources. At 
present, most published recovery estimates for nickel 
resources are based on a few bench-scale tests and 
pilot plant operations. Reduction in the expected re- 
covery of nickel that might occur in commercial 
operations could significantly affect domestic nickel 
availability. Current state-of-the-art metallurgical 
technologies applicable to domestic nickel deposits are 
complex. The sensitivity of the average total cost of 
nickel production to these technologies was assessed. 



MINERALS AVAILABILITY PROGRAM EVALUATION PROCEDURES 



The procedure followed in evaluating the avail- 
ability of domestic nickel from deposit identification 
to development of economic availability is illustrated 
in figure 2. The methods and procedures utilized in 
deposit selection, verification, and economic evaluation 
are detailed in the following sections. 

DEPOSIT SELECTION AND VERIFICATION 

From an initial review of 36 deposits, a final 
selection was made of 23 properties to be included in 



the availability analysis. All data on the 23 deposits 
were verified, and all evaluation procedures were 
standardized in order to ensure a comparable, consist- 
ent analysis. Discussions with industry personnel indi- 
cated that current economic viability can only be 
achieved with properties capable of producing 10,000 
t of nickel per year for a minimum mine life of 10 yr. 
To ensure that all economic and most significant sub- 
economic properties were included in this study, a 
selection criterion of at least 10,000 t of in situ nickel 
metal per deposit was established. 

After selected properties were identified for analy- 



Identification 
and selection 



Data 

collection 

l 



Data 
base 

i 



Data 
utilization 





Identification 
and 














j Mineral 
. Indu st ries 1 
j Location 1 
System 1 
1 (MILS) | 
1 data j 

MAS 

computer 

data 

base 


se 1 e ctlon 
of deposits 




• w 


















Tonnage 

and grade 

det e rmination 












w 


















< 




Enginee ring 

and cost 

eva 1 u ation 






w 












+ 








' i 




Deposit 

report 

preparation 




MAS 
permanent ( 
deposit 
files 




' 


i 


r 



























Taxes, 

royalties, 

cost indexes, 

prices, etc. 



Data 

verification and 

va lidation 



Variable and 
parameter 
adjustments 



Economic 
evaluation 



Sensitivity 
analysis 



Dotal 



Availabilityi 
curves 



Analytical 
reports 



J 



w 




Data 



Availability 

curves 
Analytical 
reports 



Figure 2. — Minerals Availability System (MAS) program workflow. 



sis, engineering and cost evaluations were performed. 
Hanna Mining Co.'s Nickel Mountain Mine was con- 
sidered a producer for this study. The actual designed 
mining and milling production capacities and other 
available production specifics (postmill processing) 
for Nickel Mountain were utilized. Other properties 
considered as producers included four Missouri lead- 
zinc mines, where nickel and cobalt are presumed to be 
recovered as byproducts. This recovery would be ac- 
complished by utilization of a cobalt-nickel concentrate 
circuit being investigated at the Bureau's Rolla (MO) 
Research Center (9). Nonproducing properties were 
evaluated using appropriate mining, concentrating, 
smelting and/or refining methods, production rates, 
and other parameters based upon current technology 
and industry practice. 

Tonnages and grades from actual measurements, 
samples, and production data were used when avail- 
able. Projections based on geologic evidence were 
used when necessary. Information was obtained from 
numerous sources, including the Bureau, the U.S. 
Geological Survey, State publications, professional 
journals, industry publications, annual reports, com- 
pany 10K reports, and private communications. 

Capital expenditures were calculated for explora- 
tion, acquisition, mine development, construction of 
the mine and mill, and purchase of mine and mill 
equipment. These expenditures included engineering, 
construction of buildings, costs of mobile and station- 
ary equipment, facilities and utilities, and working 
capital; environmental costs were included when 
known. Facilities and utilities (infrastructure) is a 
broad category that includes costs of access and haul- 



age, power supply, and personnel accommodations. 
Working capital, a revolving cash fund, pays for such 
operating expenses as labor, supplies, taxes, and 
insurance. 

Total operating cost of each property was deter- 
mined as a combination of direct and indirect costs. 
Direct costs include operating and maintenance labor, 
materials, payroll overhead, and utilities. Indirect 
costs include administration, facilities, maintenance 
and supplies, research, and technical and clerical labor. 
Other costs in the analysis are fixed charges that 
include taxes, insurance, depreciation, deferred ex- 
penses, interest payments (if applicable), and a 15-pct 
rate of return on invested capital. 

If available, actual mining capital and operating 
costs were used. However, when actual cost data were 
lacking, costs were either estimated by standardized 
costing techniques or derived from the Bureau's Capi- 
tal and Operating Cost Manual, using the cost estimat- 
ing system (CES) (10). Estimates based on this 
system have shown an accuracy to within 25 pet of 
actual costs. 

In addition, postmill capital and operating costs, 
or custom charges for nickel concentrate smelting and 
refining, or ferronickel production were estimated. 
Transportation costs were determined for mine to 
mill, and mill to postmill processing facilities. 



ECONOMIC EVALUATION 

Once all engineering parameters and costs were 
determined, data were entered into the Bureau's sup- 



ply analysis model (SAM) (11). An economic evalua- 
tion of each operation was performed using discounted 
cash flow rate of return (DCFROR) techniques. This 
evaluation determined a long-run average total cost 
of production of the primary commodity (nickel) for 
the life of each operation. The average total cost of 
production, sometimes called incentive price, is equiva- 
lent to a constant-dollar long-run price at which the 
primary commodity must be sold so that the present 
value of revenues over the operation's life equals the 
present value of all costs of production, including a 
prespecified rate of return on investment. The DCF- 
ROR is most commonly defined as the rate of return 
that makes the present worth of cash flow from an 
investment equal to the present worth of all after- 
tax investments (12). For this study, 15 pet was con- 
sidered the necessary rate of return to cover the op- 
portunity cost of capital plus risk. 

All capital investments incurred 15 yr before the 
initial year of the analysis (January 1983 U.S. dollars) 
were treated as sunk costs. Capital investments in- 
curred less than 15 yr before January 1983 had their 
remaining undepreciated balances carried forward to 
January 1983, with all subsequent investments re- 
ported in constant January 1983 dollars. This method 
generally results in determining a lower total cost of 
production for currently producing operations, since 
the total cost basis of producing operations is generally 
less than that for nonproducers. Neither prices nor 
costs were escalated because it was assumed that any 
increase in price would be offset by an increase in cost. 
A separate tax records file, maintained for each 
State, contains relevant fiscal parameters under which 
a mining firm would operate. This file includes cor- 
porate income taxes, property taxes, and any royalties, 
severance taxes, or other taxes that pertain to mining 
and/or nickel production. These tax parameters were 
applied to each mineral deposit under evaluation, with 
the implication that each deposit represents a separate 
corporate entity. The SAM system also contains an 
additional file of economic indexes allowing for con- 
tinuous updating of all cost estimates to the base date 
of this study (January 1983). 

Detailed cash flow analyses were generated for each 
preproduction and production year of an operation, 
beginning with the first. Upon completion of the indi- 
vidual property analyses, all properties included in the 
study were simultaneously analyzed and the data 
aggregated onto nickel availability curves. The avail- 
ability of the primary commodity (nickel) from each 
operation is presented graphically in this study as a 
function of the average total cost of production asso- 
ciated with that operation. Availability curves are 
aggregations of the total amounts of primary com- 
modity potentially available from each evaluted de- 
posit, ordered from deposits having the lowest average 
total cost of production to those having the highest. 
Total potential availability of the primary commodity 
can be estimated by comparing an expected constant- 
dollar long-run market price with the average total 
cost of production (incentive price) shown on these 
availability curves. Two types of availability curves 
can be generated : total availability curves and annual 



Table 2.— Commodity prices 1 used in this study 



Commodity 



January 
1983 



January 
1982 



Average 
1980 



Chromium per lb . 

Chromite 2 per lb. 

Cobalt per lb. 

Copper per lb . 

Gold pertroz. 

Lead per lb. 

Palladium per tr oz. 

Platinum per tr oz. 

Silver per tr oz . 

Zinc per lb. 



$110.00 


$110.00 


$110.00 


.04 


.04 


.04 


7.00 


15.00 


25.00 


.788 


.786 


1.024 


479.89 


384.12 


612.56 


.22 


.296 


.425 


110.00 


110.00 


212.88 


475.00 


475.00 


438.33 


12.40 


8.03 


20.84 


.422 


.386 


.375 



1 Prices based on data from various engineering and mining journals and the 
Bureau's "Minerals and Materials." 

2 Private communication; estimate made based on a laterite chromite 
recovery feasibility study. Price per pound of 29.9 pet chromite concentrate. 

availability curves. Annual curves can be constructed 
as disaggregations of total availability curves based 
on data for various total cost levels and/or specified 
years. The following summarizes the assumptions 
utilized in the evaluation process. 

1. All commodities are marketed at their January 
1983 prices (table 2) . 

2. Specified discounted cash flow rate of return 
(DCFROR) is 15 pet. 

3. Each operation produces at full capacity 
throughout its operating life. 

4. Lag time between initiation of development 
and full production status of nonproducing properties 
is set at a minimum. 

5. Hanna's Nickel Mountain Mine is considered a 
producer. 

6. Two domestic nickel smelters are presumed to 
exist. One would be located near Duluth, MN; the 
other would be associated with AMAX's Port Nickel 
Refinery in Port Nickel, LA. 

Item 4 is based upon the desire to determine po- 
tential availability of domestic nickel in an emergency 
or strategic situation (embargo, cartel, or wartime), 
where the nickel supply would be threatened. Proposed 
development plans allow minimum engineering and 
construction time necessary to initiate production. 
Time and potential costs involved in filing environ- 
mental impact statements, receiving required permits, 
financing, etc., have been minimized in all deposit 
analyses. 



NICKEL PRODUCT FORM AND 
COST-PRICE ANALYSIS 

Nickel is marketed in numerous product forms 
(table 3) . Most products are priced according to their 
nickel content; however, not all products receive the 
same price per pound of contained nickel. Historically, 
under normal market conditions, Inco's electrolytic 
cathode nickel price is used as a benchmark (5, p. 
VI-10). Ferronickel is priced at 6. pet less, Incomet at 
10 pet less, and Sinter-75 at 15 pet less per pound 
nickel than the benchmark price. The January 1983 
nickel market price ranged from $3.20 to $3.29 per 
pound for cathode nickel. The average spot market 
price at the beginning of 1983 was approximately $1.92 
per pound (18, p. 16). The analysis determined total 



Table 3.— Nickel product forms 

Product Nickel content, pet 

Ores 1-2 

Concentrates 10-15 

Class I: 

Electrolytic cathodes 99.9 

Carbonyl pellets 99.97 

Briquettes 99.9 

Rondels 99.25 

Nickel-89 99 

Class II: 

Ferronickel '40-50 

229-38 

Nickel Oxide Sinter (Sinter-75) 76 or 90 

Incomet 94-96 

Nickel salts 20-25 

1 Inside the United States. 

2 Outside the United States. 

Source: World Bank (5). 



cost of nickel production in constant 1983 U.S. dollars, 
as either a ferronickel or cathode nickel product. All 
proposed operations were costed to include any post- 
mill processing to achieve marketable products. Analy- 
sis also included a 6-pct reduction in value for nickel 
contained in ferronickel. 



IDENTIFICATION AND QUANTIFICATION OF 
DOMESTIC NICKEL RESOURCES 



Quantity and grade of nickel resources were 
evaluated in relation to physical, technological, and 
other conditions that would affect production from 
each deposit. Resources are categorized according to 
the latest mineral resource classification system de- 
veloped jointly by the U.S. Geological Survey and the 
Bureau of Mines (14, p. 5) (fig. 3). 

Demonstrated resources (measured plus indi- 
cated) are defined as those computed from site inspec- 
tion, including outcrops, trenches, mine workings, and 
drill holes. In situ grades of the demonstrated re- 
sources are computed from detailed sampling. The 
sites of inspection are spaced so that geologic charac- 
ter, size, shape, depth, and mineral content can be 
well established. Identified resources (demonstrated 
plus inferred) include tonnages whose location, grade, 



quality, and quantity are known or estimated from 
specific geologic evidence. 

Availability analyses were based on January 1981 
resource estimates at identified and demonstrated 
levels, which were updated to January 1983. As ex- 
ploration and development yield additional knowledge 
of grades and tonnages, resources may be reclassified 
from the identified to demonstrated levels. Domestic 
resources .that can be produced economically may in- 
crease owing to exploration and technological improve- 
ments that permit either mining lower grade resources 
or processing materials previously considered waste. 
In addition, changes in economic conditions have a 
direct impact upon the classification of a mineral 
resource. 

The 23 properties chosen for detailed availability 



Cumulative 
production 



IDENTIFIED RESOURCES 



Demonstated 



Measured 



Indicated 



Inferred 



UNDISCOVERED RESOURCES 



Hypothetica 



Probability range 
-(or) 



Speculative 



ECONOMIC 



MARGINALLY 
ECONOMIC 



SUB- 
ECONOMIC 



Reserve 



base 



Inferred 



reserve 



base 



+ 



+ 



Other 
occurrences 



Includes nonconventional and low-grade materials 



Figure 3. — Classification of mineral resources. 



analysis and their resource data are presented in table 
4. Domestic identified, speculative, and hypothetical in 
situ ore resources are reported to be nearly 12.6 billion 

t containing 25.9 million t of nickel (15, p. 440). 
Identified resources account for over 50 pet of this 

Table 4.— Domestic resource data of the 23 properties selected 
for availability analysis 

Resource level, 1 Nickel grade, 

_ million t wtpct 

Operation - 

Demon- Identi- Demon- Identi- 

strated tied strated tied 

SULFIDE 

Alaska: 

Brady Glacier A A W W 

Yakobi Island 21 .0 21 .0 0.28 0.28 

Maine: Crawford Pond 2 8.8 8.8 .91 .91 

Minnesota: 

Birch Lake area 1 ,985 1 ,985 .20 .20 

Dunka River 131 131 .16 .16 

Ely Spruce area 866 866 .21 .21 

MINNAMAX A A W W 

Partridge River 311 311 .20 .20 

Missouri: 

Buick Mine B B W W 

Fletcher Division B B W W 

Madison Mine B B W W 

Magmont Mine B B W W 

LATERITE 

California: 

Elk Camp area 15.2 .55 

Gasquet Laterite 3 14.8 21.0 .75 .75 

Little Rattlesnake Mountain 19.3 .55 

Pine Flat Mountain 6.4 15.0 .80 .80 

Red Mountain area A W W 

Oregon: 

Eight Dollar Mountain A W W 

Nickel Mountain Mine A A W W 

Red Flat 10.2 10.2 .80 .80 

Rough and Ready A W W 

Woodcock Mountain A W W 

Washington: Cle Elum Iron-Nickel 4 . NA 6.0 NA .85 

A Deposit contains more than 10,000 1 of nickel. 
B Deposit contains less than 1 0,000 1 of nickel. 
NA Not available. W Data withheld. 
1 1n situ tonnage. 3 Reference 18. 

2 Reference 17. "Reference 19. 



Table 5. — Identified nickel resources 

Resource Total domestic This study 

Ore: 

billion t 6.3 4.1 

pet of total resources 1 50.3 32.7 

Contained nickel: 

million t 13.4 9.0 

pet of total resources 51.7 35.0 

1 Total resources (identified, hypothetical, speculative) are 12.6 billion t ore, 
containing 25.9 million t nickel (15). 

total, as shown in table 5 and figure 4. Resources of 
the 23 studied properties are estimated at about 164 
million t of ore at the inferred level and 3.9 billion t 
at the demonstrated level, approximately 65 pet of 
reported identified in situ ore tonnage. The 9 million t 
of nickel contained in the studied properties is ap- 
proximately 67 pet of reported identified contained 
nickel. 

Total domestic nickel ore resources account for 
60 pet of the world's total nickel ore resources, ex- 
cluding those of the centrally planned economy coun- 
tries, but contain only 24 pet of the world's estimated 
total nickel. This is a result of low average nickel 
grades, approximately 0.21 pet, for domestic resources, 
compared with an average grade of nearly 0.98 pet 
nickel for the remaining world resources (1, p. 615; 
5, p. II-5; 15, pp. 440-442; 16, p. 12). 

Of the 23 properties studied, Hanna Mining Co.'s 
Nickel Mountain Mine near Riddle, OR, had the only 
mine-to-metal production of nickel (ferronickel) in 
1981. Buick, Fletcher, and Magmont, near the town of 
Buick, MO, are operating mines, producing lead, zinc, 
and copper, with nickel and cobalt as potential by- 
product commodities. For this study, they are proposed 
as potential producers of nickel and cobalt as by- 
products. The Madison Mine in Missouri is a past 



NICKEL RESOURCES 



CONTAINED NICKEL 




Identified resources 
50.3 pet 



Inferred resources 
included in this study 
1.3 pet 




Identified resources 
51.7 pet 



Inferred resources not 
included inthis study. 

16.7 pet yr inferred resources 
included in this study 
3.1 pet 



Figure 4. — Comparison of total estimated domestic nickel resources with those included in this study. 



Table 6.— Estimated domestic nickel resources by deposit type, 
million metric tons 



Nickel- Nickel-cobalt 
cobalt and nickel- 
laterites copper sulfides 



Primary 
lead-zinc 



Total 



In situ resources: 

Demonstrated 56.8 

Identified 163.7 

Contained nickel: 

Demonstrated .39 

Identified 1.16 

Recoverable resources: 

Demonstrated 55.1 

Identified 139.1 



3,764 
3,764 


123.9 
131.4 


3,944.7 
4,059.1 


7.8 
7.8 


.05 
.05 


8.2 
9.0 


3,138 
3,138 


129.2 
136.9 


3,322.3 
3,414.0 



producer of cobalt, with nickel and copper as by- 
products. The remaining properties include 11 nickel- 
cobalt laterites: 5 in California, 5 in Oregon (includ- 
ing Nickel Mountain), and 1 in Washington; and 8 
nickel-copper sulfides: 2 in Alaska, 1 in Maine, and 5 
in Minnesota. 

Table 6 lists the studied resource tonnage by ore 
type. Figure 5 indicates the large nickel resource in 
nickel-copper and nickel-cobalt sulfides. These deposits 
account for over 95 pet of the in-place tonnage, having 
about 87 pet of the contained nickel at the identified 
resource level, and nearly 95 pet at the demonstrated 
resource level. 

Laterites account for 1.4 pet of the in-place ton- 
nage and nearly 5 pet of the contained nickel at the 
demonstrated resource level. At the identified resource 
level, they have about 4 pet of the in-place tonnage 
and 13 pet of the contained nickel. Lead-zinc sulfides 
account for an average of 4.2 pet of the in-place 



tonnage and about 1 pet of the contained nickel re- 
source at both classification levels. 

Domestic nickel deposits occur as sulfides and 
laterites (oxides). A description of the geology for 
the studied deposits follows. Figure 6 shows the loca- 
tion of the 23 properties evaluated in this study. 



NICKEL SULFIDES 

Of the properties studied, sulfide deposits contain 
nearly 95 pet of the demonstrated nickel resource. 
With an average nickel grade of 0.2 pet, they account 
for nearly 94 pet of the recoverable nickel resources. 

Minnesota's Duluth Gabbro Complex (fig. 7) is 
one of the world's largest basic igneous intrusions and 
contains the largest demonstrated nickel sulfide re- 
sources in the United States, more than 3.7 billion 
t. The intrusion covers an area of 6,470 sq km, of 
which 1,450 sq km has been explored in northeastern 
Minnesota (20, p. 48). This explored region contains 
an estimated 3.1 million t of potentially recoverable 
nickel. The Precambrian intrusive generally consists 
of strongly layered gabbros. 

Mineralization is thought to result from mag- 
matic differentiation of the intrusion during crystalli- 
zation. The Gabbro's northwestern margin near Hoyt 
Lakes, Babbitt, and southeast of Ely contains recover- 
able concentrations of nickel and copper. An inclined 
layered ore zone several meters thick, 50 to 60 km 
long, and 1.6 to 3 km wide at the surface, has been 
traced as far as 1.6 km beneath the surface (21, pp. 



NICKEL RESOURCES 



CONTAINED NICKEL 



Lead-zinc sulfides 
3.5 pet 



Nickel-cobalt laterites 
1.4 pet 




Lead-zinc sulfides 
0.6 pet 



Nickel-cobalt laterites 
4.7 pet 




Figure 5. — Distribution of demonstrated domestic nickel resources by ore type. 



F ' 

Birch Lake, .E'yjSpruce 
Dunko River°oMlNNAMAX 
TPartridge River 



"~"oNickelMtn^- 

Re'd Flat Eight Dollar Mtn 

I ° o° I 
Rough and Ready "Woodcock Mtn 

I oPine Flat Mtn 

<^asqueto oE | k C arnp 

"Rattlesnake Mtn 




Figure 6.— Location of domestic nickel deposits. 




Figure 7. — Location of proposed operations In Minnesota'* 
Duluth Gabbro Complex and proximity to the Boundary 
Waters Canoe Area. 



1-3) . The principal nickel mineral is pentlandite asso- 
ciated with copper minerals of chalcopyrite and cu- 
banite. The average nickel-to-copper grade ratio is 
1 to 3, with localized areas of higher and lower con- 
centrations. Minor amounts of cobalt in the mineral 
cobaltite and platinum-group metals are also present. 
Birch Lake, Dunka River, Ely Spruce, Partridge River, 
and MINNAMAX are properties in the Duluth Gabbro 
that have attracted interest concerning potential de- 
velopment. These properties are in various stages of 
exploration programs (drilling, magnetic surveys, 
small test pits, outcrop sampling, etc.). Two of these 
deposits (Ely Spruce and MINNAMAX) have been 
explored extensively by shafts, with removal of large 
bulk ore samples for metallurgical testing. None of 
these properties are currently in production. 

The Brady Glacier and Yakobi Island deposits of 
Alaska (fig. 8) are also associated with ultramafic 
intrusions. Brady Glacier is a vertically oriented cy- 
lindrical deposit with maximum dimensions of 518 m 
in diameter and 229 m in length, occurring in the 
Crillon-La Perouse gabbroic intrusive. Yakobi Island 
is a synclinal-shaped deposit covering approximately 
94,000 sq m. Ore mineralization is primarily dissemi- 
nated pentlandite with chalcopyrite and cubanite. Ex- 
ploration work (drilling, small test pits, outcrop sampl- 
ing) has occurred on these properties, and some pre- 
liminary mining plans have been proposed. 

The Crawford Pond, ME, sulfide deposit (fig. 9) 
is believed to be of magmatic origin. A peridotite host 
rock intruded Cambrian age schists and was itself 



10 




LEGEND 
• Nickel sulfide deposits 
r.v.'rl Glacier within the monument 
Glacier Bay monument boundary 



Figure 8. — Location of Brady Glacier and Yakobi 
island, AK, nickel sulfide deposits. 





LEGEND 
£3 Nickel sulfide 



Figure 9. — Location of Crawford Pond, ME, nickel 
pyrrhotite sulfide deposit. 

subsequently intruded by a pegmatite, resulting ii 
concentrations of nickeliferous pyrrhotite. Nickell 
ferous pyrrhotite occurs as disseminated masses ir. 
peridotite-pyroxenite of Devonian age. This deposil 
underlies an area approximately 8.5 km long and 1.26 
km wide. In the vicinity of Crawford Pond, average 
depth to mineralization is 53 m, with an average 
deposit thickness of 23 m. The principal nickel mineral 
is pentlandite. Nickel is also present in millerite, 
gersdorffite, and niccolite. The major copper-bearing 
mineral is chalcopyrite and the cobalt-bearing mineral 
is cobaltite. This deposit contains approximately 9.0 



million t of demonstrated resource containing 0.91 
pet nickel, 0.45 pet copper, and 0.04 pet cobalt at the 
demonstrated level (17, p. 124). 

If one or all of the Brady Glacier, Crawford Pond, 
and Duluth Gabbro Complex deposits are developed, 
major environmental concerns will be encountered. 
The Brady Glacier deposit is under a glacier in Glacier 
Bay National Monument. According to the National 
Monument Act of 1936, only mining activity necessary 
to remove the minerals is allowable. This may limit 
on-site milling. 

A small portion of the Crawford Pond deposit, 
which was excluded from this study, lies under Craw- 
ford Pond. This pond would have to be drained to 
extract the entire Crawford Pond resource. Economy 
in the area of Crawford Pond is predominantly agri- 
culture, which is dependent on an adequate and safe 
water supply. Water quality standards would have to 
be complied with to protect owners of surrounding 
farms and cottages. 

The Duluth Gabbro Complex extends into the 
Boundary Waters Canoe Area (BWCA). Proposed 
mines in this complex are within a few miles of the 
southwest boundary of this wilderness. Precautions 
for water quality, air emissions, and land reclamation 
would have to be considered in order to ensure ade- 
quate protection of the BWCA. Because of these re- 
quirements, a smelting complex would probably not bp 
located in the immediate vicinity (22-23), but closer 
to Duluth, MN. 



MISSOURI LEAD-ZINC AND 
COBALT-NICKEL SULFIDES 

The four deposits evaluated in Missouri occur in 
the Viburnum lead-zinc trend (figs. 10-11) as strati- 
form ore in narrow carbonate bar and algal reef 
sedimentary environments. The principal nickel min- 
eral is siegenite, a nickel-cobalt sulfide. Principal 
copper, lead, and zinc minerals are chalcopyrite, ga- 
lena, and sphalerite, respectively. These mines have 



R3W R2W BIW *'£ B2E 



LEGEND 
^f Mines 
•S^Viburnum Trend 




|~\ I 



Figure 10. — Location of Bulck, Fletcher, and Magmont 
Mines In Missouri's lead-zinc Viburnum Trend. 



u 




Figure 11. — Location of Madison Mine in Mis- 
souri's lead zinc Viournum Trend. 

been operational for a number of years; nickel ex- 
traction would require an additional flotation concen- 
tration step, but no additional environmental con- 
siderations. 



NICKEL LATERITES 

Nickel laterites result from a gradual decomposi- 
tion due to the combined action of mechanical and 
chemical weathering of ultrabasic rocks, particularly 
peridotite in which nickel, for the most part, is con- 
tained in the mineral olivine. As nickeliferous olivine 
decomposes, nickel is released and mobilized into solu- 
tion by downward percolation of rainwater and/or 
movement of ground water. Nickel is redeposited at 
depth by chemical precipitation. This repeated action, 
known as laterization, results in a "zone of enrich- 
ment," which, in some cases, can be mined (24) . 

There are two types of lateritic nickel ores, those 
which are primarily siliceous, termed garnieritic or 
saprolitic, and nickeliferous limonitic laterite. Gar- 
nieritic laterites contain less than 30 pet iron, about 
30 pet silica, and a high nickel grade, generally ex- 
ceeding 1.5 pet. Garnieritic ores are desirable for 
ferronickel production because of their low iron, high 
magnesia, and high nickel content. Iron-rich limonitic 
laterites form when leaching of nickel is not as favor- 
able or complete as it is with garnierites, resulting in a 
mixed iron-nickel zone. Limonitic laterites containing 
approximately 50 pet iron and about 1 pet nickel are 
amenable to hydrometallurgical processing methods. 
Because of various degrees of laterization, field classi- 
fication of laterites is often subjective. Most domestic 
laterites contain large amounts of limonitic and sili- 
ceous (garnieritic) mineralization; however, garnieri- 
tic laterites are slightly more abundant. Location of 
domestic laterite deposits are shown in figure 12 
(California and Oregon) and figure 13 (Washington). 
Laterites account for about 2 pet of recoverable dem- 
onstrated nickel ore and 9 pet of recoverable nickel 
metal from demonstrated resources. 



Jl 




JlOlJ 


Canyonville'a'^*-. -. 




(401 J. 




$e V£} 


S\ */ 




11 y 

(VWedderb 


L^AI 


um fAAPoss 


. ft'' 


0H3 




3^| 


■n 11 




O \V 




(\ d 


9M OflLGON 


k^ / CALIFORNIA 


Cresc en ffirM 


J|5 /J^ 5 *©* 


Cityftf£k ™ 


1 i/TOrleons 


o \\ 


1 <f 


r-i TT^ 












? II 


\^ \\ y 












<J j&* N^X— ' 








V Big Bar 


y*\ Eureka ^'^l 




"V$> v ' 




^•ft. ^- / ^- 




VV* 




\ T^ 








/ ioiJ y- 


A 


^r » 




I 6%, 


Leggett^^ \^ 




\r~^*\^ T" 




.11 YTDosRios 



LEGEND 

fg) Lateritic deposits 
J Nickel Mountain 

2 Red Flat 

3 Eight Dollar Mountain, 
Rough and Ready. 
Woodcock Mountain 

4 Pine Flat Mountain. 
Gasquet, 

Elk Camp 

5 Rattlesnake Mountain 

6 Red Mountain 




Figure 12. — Location of nickel laterite deposits in Cali- 
fornia and Oregon. 



Proposed %- 

•plontsife ° 

•-ox ™» N 







LEGEND 
1 Laterite deposit 



tin 

\ WASHINGTON I 



M- 1 - 



^~r 



Figure 13. — Location of Cle Elum nickel laterite deposit 



The only operating domestic nickel mine is Hanna 
Mining Co.'s Nickel Mountain Mine near Riddle, OR 
(8) . This deposit measures 2 by 1.2 km, with a vary- 
ing depth of mineralization of up to 67 m, averaging 
18 m (25, p. 181). Garnierite is the principal nickel 
mineral, occurring as fillings in veinlets and boxworks. 
Nickel grades vary throughout the deposit, averaging 
less than 1.0 pet. 

The Gasquet deposit of northwest California has 
been subjected to exploration, feasibility studies, and 
some initial development. Production was originally 



12 



scheduled to begin in the spring of 1982 (18) but has 
been delayed. Total resources are estimated at 36 
million t covering about 1,200 ha of the site in a 
surface layer of soil about 7 m deep. Garnierite is the 
principal nickel mineral; cobalt and chromium are also 
present. Average grade of the deposit is about 0.75 
pet nickel, 0.01 pet cobalt, and 2.0 pet chromium. 

The remaining domestic laterites are similar in 
character to the deposits described, varying principally 
in size. Most of them have smaller tonnages, with 
average nickel grades varying from less than 0.50 pet 
to about 1.0 pet nickel. They also contain chromium 
and minor amounts of cobalt. 

Potential environmental problems associated with 
laterite developments are mainly short term for most 
evaluated domestic deposits. Proposed minesites are 
out of sight of major highways in the area. Soil would 
be better suited for vegetation when treated and re- 
placed after mining. Surface water drainage would be 
altered for the short term, but water quality would be 
maintained by pollution-control equipment at the site. 
Air quality would not be greatly affected by mining or 
processing, but significant noise would occur near the 
site. A potential problem may exist in developing the 
Gasquet laterite deposit, portions of which are within 
a RARE II study area. 



SEABED NODULES 

Significant quantities of nickel occur in seabed 
nodules, commonly known as manganese nodules. 
Nodules of economic interest range from pea to base- 
ball size and occur over large areas of the ocean floor 
from 900 to 6,000 m below sea level. Highest concen- 
trations occur in the central East Pacific Ocean from 
0° to 20° north latitude and 120° to 180° west longi- 
tude (26, p. 73). 

Recent resource estimates are placed at 2.1 billion 
dry metric tons of recoverable nodules averaging 25 
pet manganese, 1.25 pet nickel, 0.75 pet copper, and 
0.25 pet cobalt (27, p. 1), with minor amounts of gold, 
silver, and molybdenum. 

Main deterrents to near-future development of 
these resources are international politics involving 
jurisdiction over deposits, poor economics resulting 
from low metal prices, and very high projected capital 
and operating costs. Seabed nodules may be a signifi- 
cant source of nickel, and other commodities in the 
long-range supply situation; however, owing to the 
unpredictable future of these deposits, these resources 
are not included in this study. 



ENGINEERING EVALUATION 



Nickel is mined by both surface and underground 
methods according to the physical and structural 
characteristics of each deposit. Surface methods in- 
clude open pit mining similar to open pit copper mines 
or surface cuts similar to bauxite strip mines. Under- 
ground methods include room-and-pillar or cut-and-fill 
mining methods, or a combination of the two. In 
some cases a combination of open pit and room-and- 
pillar methods were used. Proposed and actual opera- 
tion schedules for mines and deposits in this study 
range from 200 to 350 days per year, with daily ore 
production running from 2,000 t to 40,000 t and yearly 
ore production from 265,000 t to 14 million t. 

Adaptability of known processing methods to 
domestic resources is a major area of concern in this 
availability analysis. The only domestic commercial 
operation for primary recovery of nickel was Hanna 
Mining Co.'s ferronickel operation at Riddle, OR. 
Principal technologies used in this evaluation are 
detailed in following sections. Sensitivity analyses on 
the total cost of producing nickel were performed by 
varying the nickel recovery rate for the principal 
nickel processing technologies described below. 



RECOVERY OF NICKEL 
FROM SULFIDES 

Sulfide ores can often be concentrated by flotation 
methods. Nickel from these concentrates is then re- 



covered by pyrometallurgical processing followed 
by hydrometallurgical methods, although totally 
hydrometallurgical methods are available and adapt- 
able. Two typical flotation methods are bulk or single- 
stage flotation and differential or multistage flotation. 
Bulk flotation removes both nickel and copper, along 
with other minor constituents, i.e., cobalt, gold, silver, 
and platinum, as a single concentrate. This concentrate 
can then be processed to separate nickel and other 
constituents. In differential flotation, the feed is sepa- 
rated into a nickel-copper concentrate and a copper 
concentrate containing most of the other minor sul- 
fides. These two separate concentrates can then be 
sent to smelters and refiners for individual processing. 
Average metallurgical recoveries for bulk and differ- 
ential flotation are typically 70 pet and 65 pet, re- 
spectively, for nickel, 88 pet for copper, and 50 pet for 
cobalt. 

Proposed beneficiation of sulfide ore is by flotation 
to produce a nickel, nickel-copper, or nickel-cobalt 
concentrate. Nickel would be recovered from these con- 
centrates by smelting and matte refining or by hydro- 
metallurgical methods. Because of the ore metallurgy, 
Alaskan and Minnesotan deposits were evaluated using 
a bulk flotation method, and Crawford Pond, a high 
nickeliferous pyrrhotite ore, was evaluated using a 
differential flotation method. An analysis comparing 
recovery of nickel from bulk and differential flotation 
methods is discussed in a later section, "Effects of 
Variable Nickel Recoveries." 



13 



Pyrometallurgical Postmill Processing 

Nickel sulfide concentrates are processed to matte in 
three pyrometallurgical stages : roasting, smelting, and 
converting. Roasting is applied to concentrates that 
contain more iron than nickel and serves as a prepara- 
tory step to smelting. Roasting is accomplished by 
heating concentrates, in fluid-bed or multihearth 
roasters, in air or an oxygen-enriched atmosphere 
to form solid oxides called calcine and gaseous sulfur 
dioxide. Roasting also preheats the material prior to 
smelting (25, p. 231). 

Smelting of this roasted concentrate, in the pres- 
ence of silicate fluxing materials, yields a sulfide phase 
containing nickel and copper (furnace matte) , and an 
immiscible liquid iron silicate slag. Smelting is car- 
ried out using flash smelting or electric smelting 
techniques. Flash smelting involves injection of a 
roasted concentrate and flux with oxygen or preheated 
air into the furnace chamber. Smelting temperatures 
are produced by the instant "flash" combustion of iron 
and sulfur. Concentrates are thus made to smelt them- 
selves. Electric furnace smelting operates on the sub- 
merged arc principle, using either prebaked or self- 
baking Soderberg electrodes. Smelting is accomplished 
by passing an electrical charge through the feed con- 
centrate. The resistance created produces heat, thus 
melting the material and producing the desired separa- 
tion. 

Conversion oxidizes iron and sulfur and eliminates 
any remaining iron sulfide from the furnace matte. 
Conversion is generally carried out in horizontal side- 
blowing converters (Peirce-Smith converters). Using 
air or oxygen-enriched air and the addition of siliceous 
fluxing material, a "finished" Bessemer matte is pro- 
duced. More recently, the trend has been toward using 
top-blowing rotary converters (TBRC) where oxygen 
is blown into a converter, oxidizing the molten nickel 
sulfide directly to nickel metal. If TBRC's are not 
used, a nickel-copper converter matte must be sepa- 
rated into its nickel and copper sulfide phases prior to 
refining. 

There are several ways to separate converter 
matte into its constituent phases. Inco's controlled 
slow-cooling method rests on the principle that slow 
cooling of sulfur-deficient matte creates conditions 
necessary for the formation of segregated mineral 
crystals and permits their growth to an adequate size. 
Coarse crystals of nickel sulfide, copper sulfide, and 
nickel-copper alloys are obtained. Matte can then be 
separated into concentrates of nickel sulfide, copper 
sulfide, and nickel-copper alloys containing precious 
metals, using conventional beneficiation methods. 
Nickel sulfide concentrates can then be dead-roasted 
to yield nickel oxide (25, pp. 275-283). 

Hydrometallurgical 
Postmill Processing 

Hydrometallurgical methods have become an im- 
portant and widely accepted method for extraction 
and recovery of nickel and byproduct metals from 
nickel mattes and sulfide concentrates. The principal 



aim of hydrometallurgy is to selectively leach desired 
metals into an aqueous phase, separating them from 
unwanted material. 

A hydrometallurgical process used at AMAX's 
Port Nickel, LA, refinery produces cobalt, copper, 
and nickel metals along with fertilizer-grade am- 
monium sulfate from nickel-cobalt and nickel-copper 
mattes. After crushing, grinding, and blending of the 
matte, leaching occurs in four separate operations. 
The first stage is an atmospheric leach where most of 
the undissolved copper and iron are separated from 
the cobalt and nickel solution. Residue is sent to a 
two-stage pressure leach where iron is removed. The 
pressure leach solution i3 then sent to a copper electro- 
winning circuit; spent solution is recycled through the 
two-stage pressure leach. From the atmospheric leach- 
ing stage the nickel-cobalt solution is sent to a cobalt 
separation circuit. Cobalt is precipitated as an impure 
cobaltic hydroxide, at atmospheric pressure at about 
60° C in the presence of trivalent nickel hydroxide. 
Impure cobaltic hydroxide is processed to remove any 
remaining nickel as a nickel ammonium sulfate salt, 
which is separated from the solution, redissolved, and 
returned to the nickel-cobalt separation step. Purified 
cobalt solution is treated with hydrogen gas; cobalt 
metal is precipitated and packaged as powdered and/ 
or compacted-sintered products. 

To recover nickel metal, the remaining nickel 
sulfate solution requires a series of delineation steps 
using hydrogen gas at elevated temperatures and pres- 
sures. Metallic nickel is precipitated, then packaged 
as powdered and/or compacted-sintered products. 

Ammonium sulfate tail liquor from both the nickel 
and cobalt densification stages is passed through ion 
exchange columns to remove any residual metals. Puri- 
fied solution is evaporated producing a blending-grade 
ammonium sulfate product (28). 

Another hydrometallurgical process, used by Sher- 
ritt Gordon Mines Ltd., Toronto, Canada, at its plant 
in Fort Saskatchewan, Alberta, can be applied directly 
to some cobalt, copper, and nickel sulfide concentrates, 
eliminating in most cases the need for smelting. In 
this process, concentrates are leached in strong 
aqueous ammonia solution at moderately elevated tem- 
perature and pressure. Good extractions are obtained 
within a temperature range of 890° to 1,060° C and at 
100 to 150 psig, using air for oxygen supply. Leach 
solution is then boiled to recover part of the ammonia 
and precipitate copper as sulfide. Partially oxidized 
unsaturated sulfur species are converted to sulfate ions 
before nickel and cobalt are recovered as pure metal 
powders by reduction with hydrogen gas under 500 
psig. In addition to metal powder and copper sulfide 
products, ammonium sulfate is produced for sale as 
fertilizer (29). Concentrates with high arsenic con- 
tent require a roasting step before leaching (SO, p. 12) . 

Bureau of Mines 
Chalcopyrlte Upgrade Process 

Sulfide deposits of the Missouri lead-zinc district 
contain nickel and cobalt. However, at present these 
metals are lost in tails and slag after processing for 
copper, lead, and zinc. The Bureau's Rolla (MO) Re- 
search Center has investigated a chalcopyrite upgrade 



14 



process that separates a chalcopyrite (copper) con- 
centrate into upgraded chalcopyrite and cobalt-nickel 
concentrates. This process consists of the following 
steps : 

1. Grinding the chalcopyrite concentrate in a 
closed circuit. 

2. Adding flotation reagents diethyl dithiophos- 
phate (collector), sodium cyanite (depressant), and 
methyl isobutyl carbinol (frother) to the hydro- 
cyclone discharge, and recovering copper concentrate 
from a second cleaner cell. 

3. Recovering the cobalt-nickel concentrate as a 
sink product from scavenger cells. 

4. Dewatering the cobalt-nickel concentrate to a 
final moisture content of approximately 10 pet. 

Nearly 83 pet of the nickel and 81 pet of the 
cobalt in the chalcopyrite concentrate entering the 
cobalt-nickel circuit were recovered in the final cobalt- 
nickel concentrate. Overall recovery, however, is only 
20 pet since only about 24 pet of the nickel and cobalt 
contained in the ore are recovered in the chalcopyrite 
(copper) concentrate (80, p. 12). 



RECOVERY OF NICKEL 
FROM LATERITES 

Both pyrometallurgical and hydrometallurgical 
methods are employed in recovering nickel from 
laterites. The method most applicable depends upon ore 
mineralogy. Little upgrading occurs except for sizing 
and drying. Thus, most of the recovery methods must 
treat a total mined tonnage, ore and waste, rather 
than a concentrate. 

Pyrometallurgy 

Pyrometallurgy is generally used to treat low- 
iron, high-magnesia garnierites with high nickel con- 
tent, such as exist at Nickel Mountain Mine near 
Riddle, OR. Nickel recoveries of 90 pet are typically 
achieved. In order to produce a ferronickel product 
containing 20 to 50 pet nickel, four steps are involved : 
drying, calcining (with or without prereduction), 
smelting, and refining. Drying can be achieved sepa- 
rately or as an initial stage of calcination. A multiple- 
hearth furnace or a fluid-bed unit is normally used for 
calcination. Smelting requires a very specific feed 
composition through strict grade control and ore blend- 
ing to attain proper slagging and reasonable energy 
consumption. The charge is melted, forming slag 
(discarded) and ferronickel phases. This ferronickel 
phase is tapped at 1,500° C, for further refining by 
desulfurization and oxidation of other metal impuri- 
ties. After refining, the ferronickel is cast into "pigs" 
for sale. Cobalt, "locked" in the ferronickel, cannot be 
recovered using this process. 



In another process, matte smelting, the same se- 
quence of steps is followed as in ferronickel reduction, 
except that sulfur or a sulfur compound (generally 
gypsum or pyrite) is injected into the feed before 
smelting. The smelter charge is melted at a tempera- 
ture above 1,350° C in the presence of coke and the 
sulfur source, producing nickel matte containing 75 pet 
nickel, which is then refined by techniques similar to 
sulfide matte separation. Cobalt can be recovered dur- 
ing refining of the nickel matte. 

Hydrometallurgy 

For this report, recovery of nickel by leaching 
processes is proposed for all California and Oregon 
laterites except Nickel Mountain where the ferronickel 
plant currently exists. Two general processes exist: 
a reduction roast-ammoniacal leach (RRAL) process 
and a sulfuric acid leach process. Domestic laterites 
tend to have a high magnesia content. This precludes 
using a sulfuric acid process on domestic laterites 
evaluated in this study. 

Freeport Nickel Co. developed the original RRAL 
process in the mid-1940's for use in their plant at 
Nicaro, Cuba. Modified versions of the original RRAL 
process, also called the Caron process, are now active 
in Greenvale, Australia, and Nonoc Island, Philippines 
(SI). 

Steps of the Caron process include (1) drying, 
(2) grinding, (3) selective reduction, (4) ammonia 
carbonate leaching, (5) separation of cobalt, (6) nickel 
carbonate precipitation and ammonia recovery, and 
(7) calcination to produce nickel oxide. The selective 
reduction step occurs in multiple-hearth roasters at 
about 700° to 760° C, in a reducing atmosphere of 
hydrogen and carbon monoxide gas. 

Limitations to this process are low recovery of 
nickel and cobalt from saprolite ore fractions and the 
cost of fuel. Modified processes used in Australia and 
the Philippines have enhanced nickel and cobalt re- 
coveries ; however, nickel recovery remains low (60 to 
65 pet) ; 9 to 15 pet of the nickel is recovered with 
cobalt as a nickel-cobalt sulfide. Further refining is 
required to separate and recover nickel and cobalt as 
separate products (82, p. 30) . 

Bureau of Mines researchers at the Albany (OR) 
Research Center investigated an RRAL process that 
incorporates (1) selective reduction in an atmosphere 
of carbon monoxide, (2) a controlled, oxidizing am- 
monia-ammonium sulfate leach, (3) solvent extraction, 
and (4) electrowinning to recover pure (greater than 
99 pet) nickel and cobalt. Advantages of this Bureau 
process (BMRRAL) include almost complete recovery 
of nickel and cobalt, recycling of reagents, low energy 
requirements compared with those of other laterite 
processing methods, and minimal pollution (SO, p. 11). 



15 



CAPITAL AND OPERATING COSTS FOR PROPOSED 
DOMESTIC NICKEL OPERATIONS 



Average total costs calculated for each of the 
deposits analyzed cover mining, milling, smelting, re- 
fining and/or ferronickel production costs, transporta- 
tion costs, capital recovery, and taxes. These costs 
often vary depending on such factors as deposit loca- 
tion, depth of ore body, grade of nickel, and presence 
of byproducts and coproducts, and physical and design 
parameters such as size of operation, mining method, 
stripping ratio, processing losses, energy consumption, 
and required labor. Analyses of operating and capital 
costs used in this evaluation are presented here. Costs 
used are weighted averages by total proposed recovered 
tonnage from each deposit, adjusted to January 1983 
U.S. dollars. Properties represented include all evalu- 
ated nonproducing deposits that contain demonstrated 
nickel resources. 

OPERATING COSTS 

Cost data for nonproducing domestic sulfide and 
laterite deposits, aggregated by mining method, are 
presented in table 7. Eighteen properties are analyzed ; 
three are laterite deposits using surface mining meth- 
ods; fifteen are sulfide deposits using either surface 
methods (four), underground methods (nine), or 
combined surface and underground methods (two). 

Mine Operating Costs 

Mine operating costs are presented as weighted 
average (based on tonnage) costs per ton of recovered 
ore and per pound of recovered nickel (table 7) . They 
reflect direct costs of labor, facilities, supplies, and 
maintenance, indirect costs of administration, and a 
15-pct rate of return. Costs do not include Federal, 
State, and local taxes, and depreciation. These are in- 
cluded as separate cost categories in the analysis. 

Mine operating costs for the 18 individual proper- 
ties range from $3.14 per metric ton of recovered ore 
for a surface sulfide operation to $13.61 per metric ton 
of recovered ore for an underground sulfide operation. 
Mine operating costs for sulfide surface operations are 
at the lower end; costs for sulfide combined surface- 



underground and underground operations are at the 
higher end. A range of $9 to $15 was obtained when 
various mining options were modeled for the Duluth 
Gabbro Complex underground operations. Operating 
costs for the three laterite surface operations are in 
the middle of the range, reflecting the high waste-to- 
ore stripping ratio of approximately 5 to 1, five times 
greater than the stripping ratio of sulfide surface 
operations. 

On a cost per pound of recovered nickel basis, 
sulfide surface mines have a lower cost than combined 
and underground operations. Laterite surface opera- 
tions have the lowest weighted average mine operating 
cost. The lower mine operating cost for the three 
laterite surface operations is a consequence of higher 
ore feed grades for nickel, averaging about 0.87 pet 
nickel, nearly five times greater than the ore feed 
grade of about 0.19 pet nickel of the 15 sulfide deposits. 

Postmine Process 
Operating Costs 

Nickel recovery from sulfide ores typically utilizes 
flotation to produce a nickel concentrate that requires 
additional smelting and refining to produce a commer- 
cial nickel product. Estimated costs associated with 
processing sulfide ores include mill, smelting, and 
refining operating costs, and/or a toll charge, which 
is essentially a capital recovery cost for the smelter 
and/or refinery. 

Domestic laterite operations do not incur a sepa- 
rate mill operating cost. Estimated laterite ore process- 
ing costs include those for crushing, screening, drying, 
and hydrometallurgical or pyrometallurgical methods 
to recover a marketable nickel product. The high costs 
(shown in table 7) reflect the lower volume of laterite 
ore actually treated. 

Combined smelting and refining operating costs for 
individual sulfide ore operations range from $4.32 to 
$25.78 per metric ton of recovered ore. All 12 Minne- 
sota operations were credited with a portion of the 
capital cost for a proposed smelter near Duluth, MN, 



Table 7. — Estimated weighted average operating cost data for nonproducing domestic nickel operations' 



Proposed Mine Mill Processing 2 Transportation 3 

°p-«- SSS2 «* 

million t t ore lb Ni t ore lb Ni t ore lb Ni t ore lb Ni 

Sulfide: 

Surface 4 7.3 $3.47 $1.15 $3.38 $1.12 $5.23 $1.74 $2.32 $0.77 

Underground 9 7.9 9.96 3.09 3.61 1.12 6.07 1.88 2.41 .75 

Combined surface-underground 2 11.7 8.78 3.07 2.98 1.04 5.62 1.97 2.35 .82 

Total or weighted average 15 8^3 a04 2^58 3A7 TTl 5^79 1.86 2.38 .76 

Laterite: surface — 3 -\2 6\96 A5 NAp NAp 46.68 2^98 NAp NAp 

NAp Not applicable. 

1 All costs are weighted averages based on total recovered ore and nickel from each deposit in January 1983 U.S. dollars. 

2 Includes all costs of processing to a marketable nickel product. 

3 Includes all costs of transporting a mill or smelter concentrate to a smelter or refinery. Laterite operations process ore on site; no transportation cost is needed. 



16 



therefore incurring only a minimum or no smelter toll- 
ing charge. Remaining sulfide operations incurred a 
much higher smelter tolling charge, since smelters 
proposed for use by these operations are independently 
owned. To some extent, the wide range reflects the 
higher cost of processing the high pyrrhotite ore from 
Crawford Pond. The wide range is not as evident when 
basing processing cost on a dollar per pound of re- 
covered nickel, with a range of $1.55 to $2.27 per 
pound. This reflects differences in nickel grades be- 
tween the Minnesota properties mill concentrates, 
which are slightly lower than nickel grades of other 
sulfide operations mill concentrates. 

Adding mill, smelter, and refinery operating costs 
together into a single total for sulfide ore processing 
results in a better comparison between sulfide ore 
processing costs and laterite ore processing costs. The 
total estimated weighted average operating cost for 
processing sulfide ore is $9.26 per metric ton recovered 
ore or $2.97 per pound of recovered nickel. The total 
estimated processing cost for laterite ore, as shown in 
table 6, was $46.68 per metric ton of recovered ore or 
$2.98 per pound of recovered nickel. On a dollar-per- 
pound-of-nickel basis, the cost of processing nickel to 
a marketable product is virtually the same for laterite 
and sulfide ores. This is due to the offsetting circum- 
stances of sulfide deposits' having lower grades and 
lower processing costs than laterites. 

Transportation Costs 

Laterite operations do not incur a transportation 
charge, since it was proposed to process mine output 
on-site. Sulfide operations, however, incur a trans- 
portation charge since their mill concentrates must be 
shipped to smelters and refineries. 

Concentrates from the 12 Minnesota operations 
would be railed to a proposed smelter complex in Du- 
luth, MN, with subsequent shipment from the smelter 
to a refinery in Canada (Sherritt Gordon) at a cost of 
$2.30 per metric ton of mined ore, $0.76 per pound of 
recovered nickel. Two Alaskan properties would barge 
their concentrates, at a total cost of $2.56 per metric 
ton of mined ore, $0.38 per pound of recovered nickel, 
to the Port Nickel, LA, facilities. It was proposed 
that a smelter would be added to the existing refining 
facilities. The concentrate from Crawford Pond, ME, 
would be transported to Outokumpu's facilities in 
Harjavalta, Finland, for processing. 



The total weighted average transportation cost for 
sulfide operations is $2.38 per metric ton of recovered 
ore, $0.76 per pound of recovered nickel. Other con- 
centrate transportation variations are presented in the 
section "Effects of Transportation." 



CAPITAL COSTS 

Capital costs for the proposed domestic nickel 
deposits are presented by mining method and ore type 
in table 8. These costs reflect the total investment 
required to develop the deposit, construct mine and 
mill facilities, initiate production, and produce a 
commercially marketable nickel product. These costs 
also include infrastructure and mine and mill plant 
and equipment. The capital cost of a smelter complex 
for the Minnesota Duluth Gabbro Complex properties 
is identified in the table. 

Proposed laterite operations require an estimated 
average capital cost. investment of nearly $275 million, 
3 pet for exploration, development, and infrastructure, 
8 pet for mine plant and equipment, and 89 pet for 
mill plant and equipment (RRAL) . 

Surface sulfide operations would require a capital 
investment of approximately $191 million (excluding 
smelter capital). Exploration, development, and infra- 
structure account for 7 pet, mine plant and equipment 
for 55 pet, and mill plant and equipment for 38 pet. 

Underground sulfide ore operations would require 
a capital cost of nearly $331 million. Costs are broken 
down into — 28 pet for exploration, development, and 
infrastructure, 41 pet for mine plant and equipment, 
and 31 pet for mill plant and equipment; smelter capi- 
tal costs are not included. 

Two proposed operations using a combined sur- 
face-underground mining method would require an 
estimated capital cost investment of $419 million. 
Capital costs breakdown is — 21 pet for exploration, 
development, and infrastructure, 33 pet for mill plant 
and equipment, and 46 pet for mine plant and equip- 
ment. 

Capital costs for 12 Minnesota properties are 
also listed separately owing to the proposed smelter 
complex. Two of the proposed operations are surface 
mines: in the Birch Lake and Ely Spruce areas. The 
remainder are underground or combined surface- 
underground operations. Total average capital cost 
for an operation of this size is estimated at $496 



Table 8. — Estimated capital cost data for nonproducing domestic nickel operations 1 



fon Number of Proposed annual capacity 

properties Ore, million t Nickel, t 

Sulfide: 

Surface 4 7.3 10,000 

Underground 9 7.9 12,100 

Combined surface-underground 2 1 1 .7 14,700 

Minnesota: 

With smelter 12 9.8 13,300 

Without smelter 12 9.8 13,300 

Laterite: surface 3 1 .2 9,200 

1 All costs are in January 1983 U.S. dollars. 

2 Annual costs are weighted averages based on annual recovered ore and nickel from each deposit. 



Total capital cost, 
millions 



Annual costs 2 



tore 



lb Ni 



$191 
331 
419 

496 
344 
275 



$ 24.34 
41.00 
71.00 

50.54 

35.00 

264.55 



$ 8.58 
12.71 
24.70 

17.00 
11.75 
16.92 



17 



million. Exploration, development, and infrastructure 
account for 14 pet, mine plant and equipment for about 
33 pet, mill plant and equipment for 22 pet, and the 
smelting complex for about 31 pet. Capital costs with- 



out the smelter complex were estimated to be $344 
million, with exploration, development, and infrastruc- 
ture accounting for 20 pet, mine plant and equipment 
for 47 pet, and the mill plant and equipment for 33 pet. 



POTENTIAL DOMESTIC NICKEL AVAILABILITY 



Nickel is potentially recoverable as either a pri- 
mary product or coproduct from most of the deposits 
evaluated. It is considered a potential byproduct from 
four Missouri deposits. All evaluated deposits were 
analyzed to determine the average total production 
cost required to recover nickel on conditions that all 
other products would be marketed at their January 
1983 commodity market price. 



PRIMARY AND COPRODUCT 
NICKEL DEPOSITS 

Total potential nickel available from identified 
and demonstrated resources of the evaluated nickel 
deposits at various total costs of production averaged 
over the life of the deposits and including a 15-pct 
rate of return is illustrated in table 9 and figure 14. 

This analysis, however, assumes the existence of 
a domestic smelter. Lack of such capacity can signi- 
ficantly affect nickel availability, as noted in the sec- 
tion "Effects of Transportation." In addition, tech- 



12 
■o 10 

3 
O 

Q. 


1 i r— 


1 

Demon strotedj 


— 1 

J 


" a 
w 

5 
1 6 




/ 


I— 'l 

1 1 


Identitied 


K 
in 

8 4 


■-^ 1 


r 




- 


_l 
< 
1- 

P 2 


\ / 

Demonstrated and identitied 




.1.. ' ' 


■ 








3 12 3 


4 




3 6 



TOTAL RECOVERABLE NICKEL, million t 

Figure 14. — Total potentially available nickel from domestic 
deposits at identified and demonstrated resource levels. 



nology for many of these properties is still at bench- 
scale or pilot plant level. This lack of proven large- 
scale process capability introduces large risk factors 
into the approximately $500 million capital investment 
for an operation. This uncertainty in technology and 
high capital expense are certainly major factors in the 
lack of development of these domestic resources. 

The United States has over 5.5 million t of nickel 
potentially recoverable from identified resources of the 
23 studied deposits. No nickel is available below an 
average total cost of production of $3.74 per pound of 
nickel. The January 1983 nickel market price was about 
$3.25 per pound. At an average total production cost 
of $4 per pound nickel, approximately 1.09 million t 
of nickel is available from sulfide deposits, and none 
from laterite deposits. Between an average total pro- 
duction cost of $4.01 and $7.50 per pound of nickel, an 
additional 1.97 million t of nickel becomes available: 
1.00 million t from sulfide deposits and 0.97 million t 
from laterite deposits. From an average total produc- 
tion cost of $7.51 to $9 per pound of nickel, 2.22 million 
t more becomes available, all from sulfide deposits. 
Above an average total cost of $9 per pound of nickel, 
approximately 0.27 million t of additional nickel is 
available, mostly from laterite deposits. 

Demonstrated resources contain a total of 4.88 
million t of potentially recoverable nickel from the 
evaluated deposits. As stated previously, no nickel be- 
comes available until the average total cost of produc- 
tion exceeds $3.74 per pound of nickel. About 1.09 
million t of nickel is available at an average total pro- 
duction cost of $4 per pound of nickel, all from sulfide 
deposits, again none from laterite deposits. At an aver- 
age total cost of $7.50 per pound, an additional 1.44 
million t becomes available: 1.00 million t from sulfide 
deposits and 0.44 million t from laterite deposits. 
Approximately 2.22 million t of additional nickel, all 
from sulfide deposits, becomes available at an average 
total cost of production of $9 per pound of nickel. 
Above an average total cost of $9 per pound of nickel, 



Table 9. — Total potential available nickel from domestic resources at selected total-cost-of-productlon ranges 

Demonstrated resources Identified resources 

Average total Paction cost range 1 Sulfide ore Laterite ore" Sulfide ore Laterite ore" 

1 ,000 1 pet increase 2 1 ,000 1 pet increase 2 1 ,000 1 pet increase 2 1 ,000 1 pet increase 2 

to $4.00 1,093 NAp 6 NAp 1,093 NAp 6 NAp 

to $7.50 2,098 92 438 NAp 2,098 92 967 NAp 

to $9.00 4,316 106 438 4,316 106 967 

Above $9.00 4,442 3 438 tf 4,442 3 1,107 15 

NAp Not applicable 

1 Total cost of production is based upon the marketability of all recovered byproduct and coproduct commodities and the existence of necessary postmine 
processing facilities. Costs include a 15-pct rate of return on the invested capital. 

2 Percent increase is the percent of additional recoverable nickel available at each total cost range over that in the next lower cost range. 



18 



only 0.13 million t becomes available, from sulfide 
deposits only. 

Nickel sulfides contribute about 80 pet of the total 
potentially recoverable nickel from identified resources 
and 91 pet from demonstrated resources. No nickel 
from either sulfide or laterite deposits at both resource 
levels is available at an average total production cost 
equal to the January 1983 market price for nickel. 



POTENTIAL ANNUAL 
NICKEL AVAILABILITY 

There are sufficient recoverable domestic nickel 
resources to promote a viable domestic nickel industry. 
However, because of secure low-cost foreign sources, 
the United States has not developed its own nickel 
production capability. Potential annual nickel avail- 
ability curves for the United States have been de- 
veloped to illustrate domestic nickel production capa- 
bility. 

In the engineering analysis of each deposit, a 
development schedule is proposed. The time required 
to develop each deposit depends on deposit location, 
required exploration, necessary preproduction develop- 
ment and plant construction, depth o^ overburden, 
type of mining proposed, and infrastructure required. 
Annual production capacities proposed in development 
and full operation schedules are estimates based on 
feasibility studies prepared for a particular deposit. 
These capacities could be increased or decreased de- 
pending on conditions that exist at time of startup. 
The capacity of Hanna Mining Co.'s Nickel Mountain 
Mine, as used in this study, is based on company re- 
source estimates, mining equipment capacity, and 
ferronickel production. 

For analysis purposes, it is assumed that Hanna's 
Nickel Mountain Mine remained a producer. Non- 
producing properties do not have a specific startup 
date or development schedule; it is assumed that pre- 
production began in a base year (N). Estimated 
potential production from N+5 to N+20 is shown in 
table 10 for both identified and demonstrated resources. 

Based on production capacities described above, 
annual production of domestic nickel resources at both 
identified and demonstrated levels would not reach 
apparent 1982 consumption levels (157,850 t) until 
year N+5 and then only if the average total cost is 
$7.60 per pound of nickel or higher. Estimated annual 
production from identified nickel resources could re- 
main at 137 pet of 1982 consumption levels for a 

Table 1 0.— Estimated annual availability of recoverable nickel for 

various years at an average total production cost of $7.60 per 

pound nickel, 1 million metric tons 

Year Demonstrated resources Identified resources 

N + 5 182 208 

N + 10 197 224 

N + 13 • 186 213 

N + 16 168 208 

N + 20 136 158 

' Includes a 15-pct rate of return on the invested capital. 



period of 16 yr or until year N+20; for demonstrated 
nickel resources, annual production could average 
118 pet per year above 1982 consumption levels for 
16 yr or until year N+16. 

Figures 15 and 16 present total potential nickel 
production at both identified and demonstrated re- 
source levels at various averaged total nickel pro- 
duction costs. These figures illustrate the rapid in- 
crease of domestic production from N to N+5 and a 
steady decline in production after N+10. This de- 
cline, however, is based upon current known resource 
levels of the evaluated deposits. Additional ex- 
ploration could increase mine life or result in the 
discovery of other nickel resources. 



BYPR ODUCT NI CKEL 
DEPOSITS 

In addition to deposits where nickel could be 
recovered as a primary or coproduct, four deposits 
in the Missouri lead-zinc mining district were ana- 
lyzed in which nickel could be recovered only as a 
byproduct. It is proposed for each operation that 
nickel is recovered in a cobalt-nickel flotation con- 
centrate, which would require further processing. 




N+5 N+IO N+15 N+20 N+25 N+30 N+35 
YEAR 



9.00- 
8.00 
7.00 
6.00 
5.00 
4.00 
3.00 
2.00- 
1.00 



I I I II II 



iN+IO 



..JN+30 



i r 



r 
i.. 



.Jn+20 



r 

I i ! 



20 40 60 80 100 120 140 160 ISO 200 220 
ANNUAL RECOVERABLE NICKEL, thousand t 

Figure 15. — Annual production from domestic deposits at 
the demonstrated resource' level, related to total cost of 
production and year of production. 



19 



275 1- 

250- 
225 - 
200- 

175- 
150 - 
125- 
100- 
75- 
50- 
25 - 



0«- 
N 



12.00 



11.00 

■a 10.00 

c 

| 9.00- 
! 8.00 

5 7 °0- 
° 6.00 
fc 5.00- 



< 3.00 - 



1.00- 



I I 1 I 1 1 

-$tl90 N Year preproduction 

development begin* " 



r— lQ-$MJ< 

J Tx — 



- 

d- 



-^ 



b. 



0-$7.5O 



0-$5,50 



^ 



y±-. 



V 



1_ L, 



_i_ 




N+5 N + IO N+15 N+20 N+25 N+30 N+35 
YEAR 



-i 1 r 



i i 



;N+IO 



IN + 20 



r 



JN + 30 



....J 






_r 



rdJ— i~- J ! 



25 50 75 100 125 150 175 200 225 250 275 

ANNUAL RECOVERABLE NICKEL, thousand t 

Figure 16. — Annual production from domestic deposits at 
the identified resource level, related to total cost of produc- 
tion and year of production. 



Production of nickel from these mines is based on 
the following assumptions: 

1. Production and marketability of primary and 
coproducts, which may include cobalt, copper, and 
lead and zinc. 

2. Adaptability of current technology to recover 
nickel from low-grade cobalt-nickel concentrates, 
which contain less than 10 pet nickel. 

Using January 1983 commodity prices (table 2) 
for all primary and coproducts and a 15-pct rate of 
return, an economic evaluation was performed to 
determine the total cost required to produce nickel 
from these four operations. 

Based on proposed nickel and cobalt recovery 
technology, approximately 12,000 t of nickel is avail- 
able at the demonstrated level and 15,000 t at the 
identified resource level from the four Missouri lead- 
zinc deposits. The total cost of production for nickel 
ranges from nearly $27 to $145 per pound. 

Although feasibility studies have been made by 
various companies, no nickel is being recovered at 
the present time. This is due in part to limited 
amounts of recoverable nickel, the low-grade cobalt- 
nickel concentrates, and the high cost to produce this 
nickel. No smelter is currently processing a low-grade 
cobalt-nickel concentrate. 



FACTORS THAT AFFECT NICKEL AVAILABILITY 



The previous section described potential avail- 
ability of domestic nickel at both identified and 
demonstrated resources levels. These analyses were 
based on proposed development plans and capital 
costs for each deposit. Criteria such as revenues 
from byproducts and coproducts (cobalt, copper, 
gold, silver, etc.), energy and labor costs, trans- 
portation costs, and the adaptability of metallurgical 
research and pilot plant studies used to recover 
nickel can significantly alter nickel's availability. 
These variables are discussed in the following sec- 
tions of this report. 



Table 11.— Domestic nickel deposits containing at least 10,000 1 
of recoverable nickel at the demonstrated resource level 

State Property 

Alaska Brady Glacier. 

Yakobi Island. 
California Gasquet Laterite. 

Pine Flat Mountain. 

Maine Crawford Pond. 

Minnesota Birch Lake area (7 operations). 

Dunka River. 

Ely Spruce area (2 operations). 

MINNAMAX. 

Partridge River. 
Oregon Nickel Mountain Mine. 

Red Flat. 



Nineteen deposits (table 11) containing at least 
10,000 t of recoverable nickel in demonstrated re- 
sources were further studied to show the effects 
of these cost sensitivities on availability of nickel. 
Total nickel production from these analyses is com- 
pared with total nickel production in the base study. 
The base study reflects costs and market prices as 
previously discussed in "Capital and Operating 
Costs for Proposed Domestic Nickel Operations" and 
"Potential Domestic Nickel Availability." 



EFFECT OF BYPRODUCT AND 
COPRODUCT REVENUES 

One condition of the base study availability 
analysis is that each operation would be able to sell 
byproducts and coproducts at January 1983 com- 
modity prices, listed in table 2. It is further assumed 
that the January 1983 commodity price covers cost 
of production to include a 15-pct rate of return, and 
that a market exists for the commodity. Figure 17 
shows the distribution of revenues from commodi- 
ties recovered from sulfide and laterite deposits. As 



20 



SULFIDE DEPOSITS 



LATERITE DEPOSITS 



Precious metals 
4.1 pet 



Cobalt 
1.3 pet 




Chromite 
1.8 pet 




Figure 17. — Distribution of byproduct and coproduct revenues generated by each commodity produced from 
sulfide and laterite deposits. 



this figure illustrates, copper from sulfide deposits and 
cobalt from laterite deposits are major byproducts. 
In both cases, nickel production contributes more 
than half the total revenues. 

To assess the impact of revenues generated by 
byproduct commodities on the availability of nickel, 
sensitivity analyses were conducted where the by- 
product revenues were based on 

1. Commodity market prices set at zero (case A) . 

2. Commodity market prices of January 1982 
(case B). 

3. Commodity market prices of average 1980 
(case C). 



o- 10- 



S 8- 



" , — r— 


— i 1 

Case A 
_r— ' Base study 


1 

J 


_ f[ Case B 

J~ Case C 

.. i i, 


t 





12 3 4 

TOTAL RECOVERABLE NICKEL, million t 



Figure 18. — Comparison of total nickel availability with 
variations in commodity market prices: base study, January 
1983 prices; case A, prices set at zero; case B, January 1982 
prices; case C, average 1980 prices. 



Changes in total availability of nickel for the 
three analyses are shown in figure 18, and sum- 
marized in table 12. 

By removing all nonnickel revenues (case A), 
the total cost of production would be borne by nickel 
revenues alone. This removal of all nonnickel 
revenues results in an increase of $0.55 to $5.23 per 
pound nickel total cost over the base study (January 
1983 commodity prices). Sulfide operations would be 
most seriously affected if nonnickel revenues were 
not available. An average increase of $3.11 per pound 
of nickel or approximately 44 pet above the base 
study cost would result. The total cost to recover 
nickel from laterites would increase $0.80 per pound 
of nickel, about 14 pet above the base study average 
if nonnickel revenues are eliminated. 

For case B, which utilizes January 1982 com- 
modity market prices in analyzing the properties, 
mixed effects occur concerning the total cost of nickel 
production with respect to the base study. These mixed 
effects are due to lower precious metal prices and a 
higher price for cobalt in January 1982 than in Janu- 
ary 1983. For two sulfide operations that produce 



Table 12.— Comparison of total available nickel within various 

total-cost-of-productlon ranges at various levels of byproduct 

and coproduct revenues, thousand metric tons 

Total cost' of nickel production, to to to to 

per pound $4.00 $7.50 $10.00 $15.00 

Base study, January 1983 market prices. . 1,093 2,536 4,880 4,880 

Case A, market prices set at zero 919 2,267 4,880 

Case B, January 1982 market prices 1 ,093 2,536 4,880 4,880 

Case C, averaged 1980 market prices 1,167 4,755 4,880 4,880 

1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 



21 



cobalt as their only byproduct, their average total cost 
of production for nickel decreases by an average $0.44 
per pound. The remaining sulfide operations, which 
produce cobalt as well as gold and silver as byproducts, 
realize an average increase in the total cost of pro- 
duction for nickel of $0.13 per pound. In this case, the 
higher cobalt price could not offset the lower precious 
metal prices. Laterite properties that produce by- 
product cobalt show an average reduction of $0.70 per 
pound in the total cost of nickel production with re- 
spect to the base study. 

Using average 1980 commodity market prices 
(case C), the average total cost of nickel production 
decreases by $0.23 to $3 per pound with respect to the 
base study. This decrease is due to higher 1980 average 
commodity prices for cobalt, copper, gold, and silver. 
Cobalt prices in average 1980 were four times the 
January 1983 level. The higher cobalt price increased 
revenue to the laterite operations that recovered co- 
balt more than to the sulfide operations that recovered 
copper, gold, silver, and only small amounts of cobalt. 
The laterite operations that recovered cobalt reduced 
their total cost of production of nickel an average of 
36 pet with respect to the base study. Sulfide proper- 
ties, which mainly recovered precious metals and cop- 
per, also benefited from the increased commodity 
prices. For the sulfide properties, the higher 1980 
commodity prices resulted in a 20-pct decrease in total 
cost of nickel production with respect to the base case. 

Comparing the three analyses (A, B, and C) with 
the base study, cases A and C have the most significant 
effect on the availability of nickel. In case A, no 
nickel from either sulfide or laterite deposits is 
available at a total cost of production of less than 
$4.60 per pound nickel. This represents the elimina- 
tion of 1.09 million t of available nickel. Case C 



resulted in 1.2 million t of nickel becoming available 
at a total cost of $2.50 per pound. This increase in 
nickel availability occurs at a total cost of produc- 
tion significantly below the January 1982 market 
price of $3.25. Because of the increase in cobalt price 
and decrease in precious metal price for case B, the 
effect of January 1982 commodity prices is mixed. 
The effect is positive (decrease in total cost of 
production of nickel) if the increase in cobalt 
revenues outweighs the decrease in revenues result- 
ing from lower precious metal prices. 



EFFECTS OF ENERGY 
AND LABOR COSTS 

Based upon proposed operating technologies for 
domestic nickel deposits, figure 19 shows expected 
distribution of direct operating costs. As illustrated, 
energy and labor are a significant portion of the 
total direct operating cost. Variations in these costs 
have a significant impact on domestic nickel avail- 
ability. 

Energy Cost Variations 

Energy costs are estimated to be 26 to 55 pet of 
the total direct operating cost for domestic laterite 
operations and approximately 18 pet for sulfide 
operations. Thus, sulfide deposits would have a 
distinct cost advantage over laterite deposits, if 
energy costs were to increase. 

Data in table 13 indicate a shift in tonnage- 
production cost relationships of recoverable nickel 
owing to increases in energy costs. A 20-pct increase 
over the base study energy costs would reduce by 



SULFIDE DEPOSITS 



LATERITE DEPOSITS 





Figure 19. — Distribution of direct operating costs by deposit type for domestic nickel deposits. 



22 



Table 13.— Energy-related variations In potential available nickel 
from domestic nickel deposits, thousand metric tons 

Total cost 1 of nickel to to to 

production, per pound $4.00 $8.00 $10.75 

Base study: 

Sulfides 1 ,093 3,832 4,442 

Laterites 438 438 

20-pct increase: 

Sulfides 623 3,832 4,442 

Laterites 438 438 

50-pct increase: 

Sulfides 2,107 4,442 

Laterites 438 438 

75-pct increase: 

Sulfides 1 ,916 4,442 

Laterites 298 438 

1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 



Table 14. — Labor-related variations In potential available nickel 
from domestic nickel deposits, thousand metric tons 

Total cost 1 of nickel to to to 

production, per pound $4.00 $8.00 $1 2.30 

Base study: 

Sulfides 1,093 3,832 4,442 

Laterites 438 438 

20-pct increase: 

Sulfides 2,141 4,442 

Laterites 438 438 

50-pct increase: 

Sulfides 1,596 4,442 

Laterites 438 438 

75-pct increase: 

Sulfides 1,168 4,442 

Laterites 438 438 

1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 



43 pet the tonnage of nickel that could be produced 
at a total cost of production of $4 per pound of 
nickel. This reduction in capacity is restricted to 
sulfide operations only, since no nickel is available 
from laterites at $4 per pound. As in the base study, 
all nickel production from laterite operations is 
potentially available at a total cost of production of 
approximately $8 per pound or higher. At $8 per 
pound, there is no change in tonnage of available 
nickel from proposed sulfide operations with a 20-pct 
energy cost increase. With a 50-pct or greater energy 
cost increase, no nickel is available at a total cost 
of production of $4 per pound. At $8 per pound of 
nickel, with a 50-pct energy cost increase, sulfide 
production decreases by 45 pet, and there is no 
decrease in potential laterite production. However, 
a 75-pct energy cost increase reduces potential nick- 
el sulfide production by 50 pet and potential nickel 
laterite production by 32 pet. 

A 20-pct increase in energy costs would, on the 
average, increase base study total costs of production 
for sulfide operations by 3 pet (4 pet for surface, 3 
pet for underground, and 3 pet for the two combined 
surface-underground operations). Base study total 
costs of production for nickel laterites (all surface 
operations) would increase by an average of 4 pet. 
An increase of 50 pet in energy costs results in a 9- 
pct increase in total cost of production of nickel for 
sulfide operations (10 pet for surface, 8 pet for under- 
ground, 8 pet for combined). A 75-pct energy cost 
boost causes a 13-pct increase for sulfide operations 
(15 pet for surface, 12 pet for underground, 12 pet 
for combined). The 50-pct and 75-pct increases in 
energy cost for laterites result in 11-pct and 16-pct 
increases in the total production cost of nickel. 

Labor Cost Variations 

Labor costs account for approximately 37 pet of 
the total direct operating costs for sulfide operations 
and about 20 to 23 pet for laterite operations. Impacts 
of increases in labor costs upon availability of recover- 
able nickel are shown in table 14. 

Analyses indicate that with a labor cost increase 
of 20 pet or higher, no nickel from either laterites or 
sulfides is potentially available at a total cost of pro- 
duction of $4 per pound. At a total cost of production 
of $8 per pound nickel, all potential nickel laterite 



production becomes available even if labor costs in- 
crease by as much as 75 pet. Potential nickel sulfide 
production decreases by 45 pet, 59 pet, and 70 pet, 
respectively, for increases in labor costs of 20 pet, 
50 pet, and 75 pet. 

Total costs of production increase by an average 
of 3 pet for laterite operations and 8 pet for sulfide 
operations for a 20-pct labor cost increase. The 8-pct 
average increase for sulfide operations can be broken 
down into 8 pet for surface operations, 7 pet for under- 
ground operations, and 8 pet for combined operations. 
A 50-pct labor cost increase results in increases of 21 
pet of the base study total cost of production for all 
sulfide operations: 24 pet for surface operations, 19 
pet for underground, and 20 pet for combined opera- 
tions. For the laterite operations, a 50-pct labor cost 
increase causes a 7-pct increase, while a 75-pct labor 
cost increase creates a 10-pct increase in total cost 
of production compared with the base study costs. For 
a 75-pct labor cost increase, sulfide operations total 
cost of production increases by 31 pet : 33 pet for sur- 
face, 29 pet for underground, and 30 pet for combined 
operations. 

Domestic nickel availability is affected by both 
energy and labor. Increases in energy costs affect 
laterite operations slightly more than sulfide opera- 
tions, and labor costs affect sulfide operations more 
than laterite operations. This is to be expected since 
sulfide operations tend to be labor intensive while 
laterite operations are energy intensive. 

EFFECTS OF VARIABLE 
NICKEL RECOVERIES 

A ferronickel reduction process is the only com- 
mercial process that has been used in the United 
States for the recovery of nickel. Other metallurgical 
processes for recovering nickel from domestic sulfide 
and laterite ores are at bench-test or pilot plant scale. 
Because of the uncertainties in their commercial appli- 
cation, these various processing technologies have a 
wide range of reported recoveries (table 15) . Accord- 
ing to discussions with industry personnel, uncertainty 
concerning recovery and scale-up problems is a factor 
preventing private industry from developing nickel 
properties. 

Metallurgical methods used in the base study con- 



23 



Table 15.— Typical recoveries of nickel and coproducts from 
domestic resources, by metallurgical process and 
ore type, percent 



Ore type and metallurgical process 



Nickel Cobalt Copper 



Sulfide: 

Bulk flotation 55-85 50 80-96 

Differential flotation 57-72 50 86-90 

Laterite (oxide): 

Caron RRAL process 60-75 40-90 NA 

BMRRAL process 78-93 52-87 82 

Missouri lead-zinc: 
Flotation and chalcopyrite upgrade process — 20 20 40 

NA Not available. 

NOTE. — Chromite recovery is 50 pet for the RRAL process. 
Sources: References 9, 28, 31 , 33. 



sist of the following systems. Sulfide ores utilize bulk 
and differential flotation depending on ore characteris- 
tics, with nickel recoveries ranging from 74 to 85 pet 
for bulk flotation and at 65 pet for differential flotation. 
For laterite ore, a reduction roast-ammoniacal leach 
(BMRRAL) process is used, with nickel recoveries of 
90 to 92 pet. Metallurgical recoveries of cobalt and 
copper from sulfide ores are estimated at 50 pet and 
80 to 89 pet, respectively. Metallurgical recovery of 
cobalt from laterite ores is estimated at 80 pet. 

Analyses were conducted using a high, medium, 
and low limit of nickel metallurgical recoveries to 
show effects of recovery variations on potential nickel 
availability. Technologies compared are the Caron 
process, the Bureau of Mines reduction roast-ammonia- 
cal leach process (BMRRAL) for laterite ores, and 
bulk and differential flotation for sulfide ores. Table 16 
lists metallurgical recoveries used in the analysis. 

With the high limit of nickel recovery (85 pet), 
4.9 million t of nickel could be recovered from sulfide 
ores using a bulk flotation process. This is an 11-pct 
increase in total potentially available nickel and an 
8-pct reduction in the average total cost of production 
of nickel compared with the availability and cost deter- 
mined in the base study, which utilized recoveries of 
74 to 85 pet. Approximately 1.2 million t of nickel 
would be available at a total cost of $3.45 per pound. 
Differential flotation at the high nickel recovery limit 
of 72 pet reduces the base tonnage of nickel potentially 
available by 3 pet to about 4.3 million t, with a cor- 
responding increase of 2 pet in the total cost of pro- 
duction. No nickel is available until the total cost of 
production is $3.85 per pound or higher. 

Midlevel nickel recovery limits for bulk and dif- 
ferential flotation of 74 and 65 pet, respectively, 



result in decreases of 1 pet and 12 pet, respectively, in 
total nickel potentially available, with average in- 
creases in total costs of production of 0.4 and 11 pet 
over the base study. Bulk flotation would recover 
600,000 t of nickel at a total cost of production of 
$3.85 per pound. No nickel is available using differen- 
tial flotation until the total cost of production is $4.30 
per pound. 

Total potentially recoverable nickel decreases from 
the base study by 30 pet and 26 pet, respectively, for 
bulk and differential processing, at lower recovery 
limits of 55 and 57 pet. Increases to the total cost of 
production are 26 pet (bulk flotation) and 22 pet 
(differential flotation). No nickel is potentially avail- 
able until the total cost of production has reached 
about $5.05 per pound for bulk flotation or $4.90 per 
pound for differential flotation. 

Laterite ores are not affected as much as sulfide 
ores by variations in postmine nickel recovery process- 
ing. Two processing technologies are compared with 
the base study: the BMRRAL process and the Caron 
RRAL process. Hanna Mining Co.'s Nickel Mountain 
Mine operation was not included in the analysis since 
it is considered a producer using a commercially 
established nickel processing technology. 

High levels of nickel recovery in both cases (93 
pet for each) increased the tonnage of nickel available 
above the base study tonnage by 1 pet for each process. 
The total cost of production for nickel was reduced by 
5 pet for the BMRRAL process and by 2 pet for the 
Caron process. 

At median nickel recovery levels (83 pet for 
Caron, 89 pet for BMRRAL) nickel tonnage was re- 
duced by 8 pet and 2 pet, respectively, below that re- 
covered in the base study analyses. An increase over 
the average total cost of production determined in the 
base study occurred for each process : 4 pet for Caron 
and 1 pet for BMRRAL. 

Using the lower limits of nickel recovery (73 pet 
for Caron, 85 pet for BMRAAL) , the amount of nickel 
potentially available is reduced by 10 pet (Caron) and 
3 pet (BMRRAL), resulting in an increase in total 
cost of production of 21 pet (Caron) and 5 pet 
(BMRRAL) over the base study level. 

None of the laterite cases analyzed produced a 
total cost of nickel production of less than $4 per 
pound. This represents no significant change from the 
base study. Table 17 summarizes the effect of various 
metallurgical nickel recovery technologies on the total 
tonnage of potentially available nickel. 



Table 16. — Metallurgical recoveries used In 
this analysis, percent 



Ore type and 
metallurgical process 


Base 


Nickel 
High Median 


Low 


Copper 


Cobalt 


Sulfide: 

Bulk flotation 

Differential flotation 

Laterite: 

Caron RRAL process . . 

BMRRAL process 


74-85 
65 

NAp 
90-92 


85 
72 

93 

93 


74 
65 

83 

89 


55 
57 

73 
85 


80-89 
87 

NAp 
NAp 


50 
50 

NAp 
80 


NAp Not applicable. 
Sources: References 9, 28 


1,31,33. 













EFFECTS OF 
TRANSPORTATION 4 

The cost of shipping mill concentrates for further 
processing has a significant effect on the total cost of 
nickel production. For the base study, concentrates 
from operations in Minnesota would be processed at a 
proposed smelting complex operating near Duluth, 
MN, with subsequent shipment of matte to Sherritt 



4 Transportation and cost data were provided by Dick Flschback 
and John Black of the U.S. General Services Administration. 



24 



Table 17.— Effects of metallurgical recoveries on the potential 

availability of nickel over various total-cost-of-production 

ranges, thousand metric tons 

Total cost 1 of nickel to to to 

production, per pound . . $4.00 $8.50 $13.00 

BASE STUDY 

Sulfides 1,093 4,271 4,442 

Laterites 438 438 

SULFIDES 

Bulk flotation: 

High 1 ,226 4,743 4,934 

Medium 1 ,093 4,245 4,405 

Low 1,171 3,406 

Differential flotation: 

High 1,064 4,136 4,292 

Medium 2,227 3,923 

Low 1,613 3,515 

LATERITES 

Caron RRAL process: 

High 443 443 

Medium 420 420 

Low 60 396 

BMRRAL process: 

High 443 443 

Medium 434 434 

Low 425 425 

1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 



Gordon's plant in Fort Saskatchewan, Alberta, 
Canada. Construction of on-site smelting and refin- 
ing facilities for Alaskan and Maine deposits did not 
appear warranted because of limited known resources. 
For the purpose of this study, concentrates from the 
Maine operation would be shipped to facilities in 
Harjavalta, Finland, and concentrates from the two 
Alaska operations would be shipped to a proposed 
smelter at Port Nickel, LA, near the existing refinery. 

To limit the size and scope of this analysis, only 
the Minnesota Duluth Gabbro Complex properties were 
used. They represent 86 pet of potential nickel pro- 
duction and would be most seriously affected by trans- 
portation costs. 

In addition to proposed construction of a Duluth, 
MN, smelting complex, four options for transporting 
Duluth Gabbro concentrates were considered: 

1. Rail transportation to Port Nickel, LA, for re- 
fining. 

2. Barge transportation to Port Nickel, LA, for 
refining. 

3. Rail transportation to Sudbury, Ontario, 
Canada, for refining. 

4. Barge plus rail transportation to Sudbury, On- 
tario, Canada, for refining. 

Table 18 contains approximate transportation 
rates, distances, destinations, and modes for these 
options. Table 19 summarizes the changes that could 
occur to the total cost of nickel production when the 
cost of transporting smelter matte to different refining 
facilities is considered. 

Option 4, transporting Minnesota nickel smelter 
mattes via barge and rail to Sudbury, Ontario, Canada, 



Table 1 8. — Distances, rates, destinations, and modes used in the 
transportation analysis 

u..m.~j ~„a ,w»;„«.i~„ Estimated Estimated rate, 1 

Method and destination distance, km per t/km 

Rail to: 

Port Nickel, LA 2,600 $0.07 

Sudbury, Ontario, Canada 1 ,325 .22 

Barge to: 

Port Nickel, LA 2,600 .005 

Sudbury, Ontario, Canada 1,047 .016 

1 All rates are noncontracted (contract rates would be less), updated to 
January 1983 dollars from January 1981 dollars. 

Source: GSA Transportation Dep., Denver Federal Center, Building 41, 
Denver, CO. 

Table 19. — Transportation-related cost variations 1 compared 
with the base analysis 









Transportation options 2 




Origin 


Operation 










1 


2 


3 


4 


Birch Lake 


. Surface 


-$0.11 


-$0.49 


+ $0.06 


-$0.06 


Do 


. Underground . . 


-.11 


-.49 


+ .06 


-.59 


Dunka River . . . 


. Combined 


-.35 


-.81 


-.11 


-.90 


Ely Spruce 


. Surface 


-.04 


-.25 


+ .18 


-.36 


Do 


. Underground . . 


+ .06 


-.26 


+ .17 


-.37 


MINNAMAX . . . 


do 


+ 1.09 


+ .06 


+ 1.68 


-.11 


Partridge River 


Combined 


-.19 


-.49 


-.05 


-.02 



1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 

2 Options: 1 , rail to Port Nickel; 2, barge to Port Nickel; 3, rail to Sudbury; 4, 
barge plus rail to Sudbury. 

for refining, is the most cost effective. Approximately 
0.47 million t of nickel is potentially available at a 
total cost of production of $3.25 per pound, about equal 
to the January 1983 market price. Nearly 1.09 million 
t is available at $3.40 per pound. The overall decrease 
in the total cost of production is about 8 pet from the 
base study cost. 

Transporting the matte by barge to Port Nickel, 
LA, option 2, is the next most cost effective, reducing 
the overall average total cost of production by 6 pet, 
with 1.09 million t of nickel potentially available at a 
$3.50-per-pound total nickel production cost. Data in 
table 20 indicate the shift in the tonnage of available 
nickel at various total nickel production costs caused 
by changes in the cost of transportation. 



Table 20. — Comparison of estimated total potential available 

nickel at various total-cost-of-production ranges for 

transportation options, thousand metric tons 

Total cost 1 of nickel to to to 

production, per pound $3.50 $6.50 $10.00 

Base study 2 6 1,573 4,185 

Options: 

1— rail to Port Nickel 1 ,573 4,185 

2— barge to Port Nickel 1,093 1,925 4,185 

3— rail to Sudbury 1,573 4,185 

4— barge to Sudbury 1,093 1,925 4,185 

1 Costs are in January 1983 dollars and include a 15-pct rate of return on 
invested capital. 

2 Data include only the 12 proposed Minnesota Duluth Gabbro properties. 



25 



CONCLUSIONS 



Twenty-three nickel-bearing deposits were ana- 
lyzed to determine the quantity of nickel that could be 
recovered from each deposit and the total cost of 
production at each operation, including a 15-pct rate 
of return on investment. 

Identified nickel resources evaluated in this study 
contain an estimated 9.0 million t of in situ nickel, 
with an estimated 5.5 million t of recoverable nickel. 
Demonstrated nickel resources contain an estimated 
8.2 million t of in situ nickel, with 4.8 million t 
estimated to be recoverable. 

Annual production of nickel, as proposed, could 
meet and exceed domestic 1982 consumption levels for 
16 yr if the total cost of production as well as market 
price reached $7.60 per pound of nickel and market 
prices for other commodities remained at their Janu- 
ary 1983 levels. This assumes that nickel sulfide con- 
centrate smelting facilities would be established in the 
United States. 

Byproducts and coproducts can account for up to 
35 pet of the total revenues from the nickel-bearing 
deposits in this study. An analysis of these deposits 
revealed that, without recovering byproducts and co- 
products, the economic viability of domestic nickel 
Droduction is reduced even more. 



Domestic nickel availability is affected by both 
energy and labor. Increases in energy costs affect 
laterite operations slightly more than sulfide opera- 
tions. For laterite operations, the average total cost of 
production is increased by 4 and 16 pet for increases 
of 20 and 75 pet in energy cost. For sulfide operations, 
the average total cost of production is increased by 
3 and 13 pet for the same energy cost increases. Labor 
cost increases of 20 and 75 pet increase total costs of 
production by 3 and 10 pet for laterites and 8 and 30 
pet for sulfide operations. 

Laterite ores are not affected as much as sulfide 
ores by variations in postmine nickel recovery proc- 
esses. Variations in sulfide ore processing methods 
resulted in increases of 11 pet to decreases of 23 pet 
in nickel total availability, while laterite ore processing 
variations resulted in increases of 1 pet to decreases 
of 10 pet in total available nickel. 

The transportation analyses indicated that, unless 
nickel smelting facilities are established within the 
United States, with refining facilities within a close 
proximity (i.e., within 1,100 km), much of the poten- 
tial nickel resources of the Duluth Gabbro Complex of 
Minnesota would not be economically viable. 



26 



REFERENCES 



1. Matthews, N. A., and S. P. Sibley. Nickel. Ch. in 
Mineral Facts and Problems, 1980 Edition. BuMines B 
671, 1981, pp. 611-627. 

2. U.S. Bureau of Mines. Nickel in December 1982. 
Mineral Industry Surveys, Mar. 8, 1983, 6 pp. 

3. Sibley, S. F. Nickel. BuMines Mineral Commodity 
Profile, 1983, 8 pp. 

4. . Nickel. Sec. in BuMines Mineral Com- 
modity Summaries 1983, pp. 106-107. 

5. World Bank. Nickel Handbook. Commodities and 
Export Projection Div., Economic Analysis and Projection 
Dep. Feb. 1981, 29 pp. 

6. U.S. Bureau of Mines. Nickel in June 1983. Mineral 
Industry Surveys, Sept. 7, 1983, 5 pp. 

7. U.S. Bureau of Industrial Economics (Dep. Com- 
merce). 1983 Industrial Outlook for 250 Industries With 
Projections for 1987. Jan. 1983, 530 pp. 

8. Engineering and Mining Journal. Nickel Market Goes 
Into Deeper Slump. V. 185, No. 5, 1982, p. 19. 

9. Clifford, R. K., and L. W. Higley, Jr. Cobalt and 
Nickel Recovery From Missouri Lead Belt Chalcopyrite 
Concentrates. BuMines RI 8321, 1978, 14 pp. 

10. Clement, li. K., Jr., R. L. Miller, P. A. Seibert, L. 
Avery, and H. Bennett. Capital and Operating Cost Esti- 
mating System Manual for Mining and Beneficiation of 
Metallic and Nonmetallic Minerals Except Fossil Fuels in 
the United States and Canada. BuMines Spec. Publ., 1980, 
149 pp. ; also available as : 

STRAAM Engineers, Inc. Capital and Operating Cost 
Estimating System Handbook — Mining and Beneficiation 
of Metallic and Nonmetallic Minerals Except Fossil Fuels 
in the United States and Canada. Submitted to BuMines 
under contract J0255026, 1977, 374 pp.; available from 
Minerals Availability Field Office, BuMines, Denver, CO. 

11. DavidofF, R. L. Supply Analysis Model (SAM) : A 
Minerals Availability System Methodology. BuMines IC 
8820, 1980, 45 pp. 

12. Stermole, F. J. Economic Evaluation and Investment 
Decision Methods. Investment Evaluations Corp., Golden, 
CO, 3d ed., 1980, 443 pp. 

13. U.S. Bureau of Mines. Minerals and Materials — A 
Bimonthly Survey, Apr./May 1983, 48 pp. 

14. U.S. Geological Survey and U.S. Bureau of Mines. 
Principles of a Resource/ Reserve Classification for Min- 
erals. U.S. Geol. Surv. Circ. 831, 1980, 5 pp. 

15. Brobst, D. A., and W. P. Pratt (eds.). United States 
Mineral Resources. U.S. Geol. Surv. Prof. Paper 820, 1973, 
722 pp. 

16. Nielsen, B. V., and B. H. Burton. Minerals Avail- 
ability System: Nickel in Minnesota. Final report on 
BuMines contract G0144126 with MN Geol. Surv., 1975, 
13 pp.; available upon request from D. A. Buckingham, 
Minerals Availability Field Office, BuMines, Denver, CO. 

17. Basin, E. S. A Pyrrhotite Periodotite From Knox 
County, Maine: A Sulfide Ore of Igneous Origin. J. Geol., 
v. 6, 1908, pp. 124-133. 

18. Engineering and Mining Journal. California Nickel 
Readies Co-Cr-Ni Mine for 1982 Production Start. V. 182, 
No. 6, 1981, pp. 35, 39. 



19. Lamey, C. A., and P. E. Hotz. The Cle Elum River 
Nickeliferous Iron Deposits, Kittitas County, Washington. 
U.S. Geol. Surv. Bull. 978-B, 1952, pp. 27-67. 

20. Listerud, W. H., and D G. Meineke. Mineral Re- 
sources of a Portion of the Duluth Complex and Adjacent 
Rocks in St. Louis and Lake Counties, Northeastern Min- 
nesota. MN Dep. Nat. Resour., Div. Miner., Rep. 93, 1977, 
49 pp. 

21. Lawver, J. E., R. L. Wiegel, and N. F. Schulz. Min- 
eral Beneficiation Studies and an Economic Evaluation of 
Minnesota Copper-Nickel Deposit From the Duluth Gab- 
bro. Report on BuMines contract G0144109, Dec. 1975, 92 
pp; available upon request from D. A. Buckingham, 
Minerals Availability Field Office, BuMines Denver, CO. 

22. Hays, R. M. Environmental, Economic, and Social 
Impacts of Mining Copper-Nickel in Northeastern Minne- 
sota. Report on BuMines contract S0133084 with Dep. 
Civil and Miner. Eng., Univ. MN, Aug. 1974, 123 pp.; 
available upon request from D. A. Buckingham, Minerals 
Availability Field Office, BuMines Denver, CO. 

23. Tull, R. E. State Mineral Policy and Copper-Nickel 
Mining Profitability. Ch. 17 in Regional Copper-Nickel 
Study. MN Environ. Quality Board, v. 5, 1977, 63 pp. 

24. Golightly, J. P. Nickeliferous Laterites; A General 
Description. Paper in International Laterite Symposium 
(New Orleans, LA, Feb. 19-21, 1979). Soc. Min. Eng. 
AIME, New York, 1979, pp. 3-24. 

25. Boldt, J. R., Jr. The Winning of Nickel. Its Geology, 
Mining, and Extractive Metallurgy. Wadsworth Publ. Co., 
Belmont, CA, 1975, 500 pp. 

26. National Academy of Sciences. Mining in the Outer 
Continental Shelf and in the Deep Ocean. Washington, 
DC, 1975, 102 pp. 

27. McKelvey, V. E., N. A. Wright, and R. W. Rowland. 
Manganese Nodule Resources in the Northeastern Equa- 
torial Pacific. U.S. Geol. Surv. OFR 78-814, 1978, 27 pp. 

28. Engineering and Mining Journal. AMAX's Port 
Nickel Refines the Only Pure Nickel in the U.S. V. 178, 
No. 5, 1977, pp. 76-79. 

29. Canadian Institute of Mining and Metallurgy. Min- 
eral Industries in Western Canada (Proc. 10th Commonw. 
Min. and Metall. Congr., Sept. 2-28, 1974). Sec. 3, art. B, 
pp. 4-5. 

30. Peterson, G R., D. I. Bleiwas, and P. R. Thomas. 
Cobalt Availability — Domestic. A Minerals Availability 
System Appraisal. BuMines IC 8848, 1981, 31 pp. 

31. Kukura, M. E., L. G. Stevens, and Y. T. Auck. 
Development of the UOP Process for Oxide Silicate Ores 
of Nickel and Cobalt. Paper in International Laterite 
Symposium, New Orleans, LA, 1979. Soc. Min. Eng. 
AIME, New York, 1974, pp. 527-552. 

32. Siemens, R. E., and J. D. Corrick. Process for Re- 
covery of Nickel, Cobalt and Copper From Domestic 
Laterites. Min. Congr. J., v. 163, No. 1, 1977, pp. 29-34. 

33. Veith, D. L Minnesota Copper Nickel Resource 
Processing Model. Unpublished BuMines report, v. 6, 
1977, 65 pp.; available upon request from D. A. Bucking- 
ham, Minerals Availability Field Office, BuMines, Denver, 
CO. 



27 



APPENDIX 

Table A-1 .—Ownership and type of mineral holdings of domestic nickel properties 



Property 



Domain 



Type of mineral holdings 



Owner-operator 



Status 



Owner- 
ship, pet 



Alaska: 

Brady Glacier 

Funter Bay 

Mirror Harbor 

Snipe Bay 

Yakobi Island 

California: 

Elk Camp area 

Gasquet Laterite — 

Little Rattlesnake 
Mountain. 

Pine Rat Mountain . . 

Red Mountain area . 
Maine: Crawford Pond. 



Minnesota: 
Birch Lake area 



National monument 

National forest 

... .do 

... .do 

... .do 



Located claims Inspiration Develop Co. . . Owner-operator 100 

... .do Admiralty-Alaska Gold do 100 

do Inspiration Develop Co do 100 

do Robert M. Johnson do 100 

do Inspiration Develop Co do 100 



National forest, private. 

National forest 

....do 



... .do 

National forest, private. 
Private 



do California Nickel Corp do 100 

do do do 100 

do Del Norte Mining Co Leased from California 100 

Nickel Corp 

do Hanna Mining Co Owner-operator 100 

Claims, leases, fee ownership do Owner 100 

Private lease, fee ownership Know Mining Corp do 1 

Hanna Mining Co Owner-operator > 100 

Basic Inc do J 



National forest Federal, State, and private leases 



Inco U.S. Inc Owner 

Hanna Mining Co Owner-operator I 1 



Dunka River 

Ely Spruce area . . 

MINNAMAX 

Partridge River . . . 
Missouri: 
Annapolis Mine . . . 
Bonne Terre Mine 

Brushy Creek 

Buick Mine 



.do 
.do 

do 
..do 



.do 



Duval Corp do. 

United States Corp do . 

Inco do. 



00 



Federal, private leases, fee 

ownership. 
Federal, State, and private leases . AMAX Exploration, Inc 



100 
100 



.do 



. . Owner 100 



.do Owner-operator , 



100 



Private 
Mixed . 
... .do 
....do 



Private lease, fee ownership St. Joe Minerals Corp. . . . Owner 100 

do do Owner-operator 100 



Fletcher Division. 

Indian Creek 

Madison Mine . . . 
Magmont Mine . . 



....do .. 
Private . . 
Unknown 
Mixed . . . 



100 
50 
50 



Milliken Mine do 



Mine La Motte Group. 

West Fork 

Montana: Stillwater 

Oregon: 

Eight Dollar Mountain 



Nickel Mountain Mine 



... .do 

....do 

National forest . 



National forest, State, BLM, private. 



Red Flat . 



Rough and Ready . . 

Woodcock Mountain 
Washington: 
Blewett Pass 



Cle Elum Iron-Nickel 
Mt. Vernon Nickel . . . 



Private 
Mixed . 



National forest, State, BLM, private. 

....do 

National forest 

Mixed 

Private 



Federal, private lease do do 

Ownership, mineral rights only AMAX Lead Co. — MO do 

Homestake Lead Co. — Owner 
MO. 

Federal, private leases St. Joe Minerals Corp. . . . Owner-operator 100 

Lease, fee ownership do do 100 

Private lease Anschutz Mining Corp. . . . Owner 100 

Federal, private lease, fee Cominco American Inc Owner-operator 50 

ownership. Dresser Minerals Owner 50 

Private lease, fee ownership, Kennecott (Ozard Lead) . . Owner-operator 100 

mineral rights only. 

Federal, private leases Anschutz Mining Corp. . . . Owner 100 

do ASARCO Inc do 100 

Located claims, Federal lease Anaconda Co Owner-operator 100 

Located claims, private leases, fee California Nickel Corp. . . . Majority owner . 
ownership. Hanna Mining Co Owner 

Meridian Resources Ltd do 

Pan Artie do 

Royalty lease, fee ownership Hanna Mining Co Owner-operator 

Located claims do do 

Red Flat Nickel Corp Owner 

Big Basin Nickel Corp do 

Claims, leases, fee ownership Inspiration Develop Co. . . Majority owner . 

Walt Freeman Owner (*) 

do Coastal Mining Co do 80 

Located claims Washington Nickel Mining do . 

and Alloys Inc. 
Fee ownership Burlington Northern RR do . 

Inc. 
do Pacific Nickel Co do . 



( 1 ) 

100 
28 
59 
13 
95 



100 
100 
100 



BLM Bureau of Land Management. 
1 Unknown. 



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